It's not letting you select it because you don't have a previous version of windows installed. I read that other user on this forum have done an install with the full version and able to use the upgrade key... search or wait till some one more familiar with this comes along. GL
You can boot into a live CD or usb running ubuntu. Log in as root, go to system->Administration->Disk Utility then select HDD and format..or delete partition. Or just wait till you run windows installation you can format the drive from there too.