If you have a previous version of windows that you want to upgrade from, the upgrade is legitimate.
If you are upgrading from XP, or vista with an opposite 32 or 64 bit system, you are instructed by ms to do a clean install of windows 7.
Well, yea, but that means 2 licenses of an OS for a clean system. If you have Windows installed on a PC already, you can't take that disk and use it with an upgrade version on a second PC. You can still install an "Upgrade" version of Windows 7 on XP or whatever, you just can't do an upgrade installation.
If he has a clean system (which is what it sounds like he's not looking for an Upgrade version), no OS, so cheapest "legal" way is to get an OEM version.