Who gives a PooPoo HOW they upgraded the system? The Legal or Ill Eagle aspects are None of anyone else's damn business. It is people like this that make me actually WANT to use that kind of software.
Getting back to this guys ORIGINAL question, if you update from Home to Ultimate, your key is immediately worthless, unless you install Home Premium back in. And Oh, Yah, what Area51 said: Once the motherboard fries, you got to toss the key too, but if you replace the motherboard, Microsoft MAY give you a new key.
The So called "ill eagle" versions, have a way to generate a key code based on the hardware in your machine.
This is why, if you have a store bought PC, and you change just ONE piece of hardware, sometimes you have to re-activate. I've done this a hundred times.