Hard Drive Upgrade On A "System Restore" License

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I have a 2 1/2 year old HP Pavilion, HP Home Edition, P4 2.5GHz machine. It came with a utility to burn "System Restore" CDs, plus a "System Restore" partition on the hard drive (drive D).

I want to upgrade to a larger C drive, but I do not want to start over with 2 1/2 year old OEM software.

I have tried using Norton Ghost to replicate the existing hard drive onto the new drive, but it will not boot, with Windows giving a license violation error (can't remember the exact message).

I emailed HP support and they say the only thing I can do is a System Restore on the new hard drive and start over with Windows updates, installing all of my software, etc.

I do not want to do that, since I have some applications that were activated by the vendor using their online activation service, but that vendor has now gone belly-up. This would mean I can't reload those apps. Also, given the amount of software I have loaded and upgraded over the years, recovering from the system restore will take several days, at least.

Question: Can I purchase a retail Windows XP Home Upgrade package and "upgrade" the copy of Windows on my new hard drive, and activate it using the license code from the retail box? Or, will the upgrade software in Windows refuse to upgrade an existing Xp Home system?
 
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