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I never buy upgrade versions, for exactly this type of reason.
Some upgrades install whether you have prior versions installed or not.
Some upgrades require that you have a prior version installed, or if not, that you have the CD of the prior version on hand.
I remember one time, I forget exactly what product it was, but I got a new machine, and was transferring stuff from my old machine to the new machine.
I went to install Version 6 (which was an upgrade). It required Version 5 to be installed on the machine. After some cursing, I found the Version 5 CD and went to install it. Oops, it was an upgrade too, and, yes, it required Version 4 to be installed. Luckily it was not an upgrade *and* I still had the CD. So, I had to install V4, then V5, then V6, then delete V4 and V5.
After that fiasco, I swore off "upgrades" for life. Way too many "gotchas". And usually there's no easy way, or no way at all, to upgrade from the upgrade version to the full version. Meaning you buy the upgrade, find out it doesn't work for whatever stupid reason, then have to go buy the full version and throw the upgrade in the garbage.
Now, I just get my full version software from AcademicSuperStore where possible, Costco, or Amazon.
I bought PE7/PSE7 upgrade bundle, but neither program asks for prior versions when installing.
Did you try installing your upgrade version on a machine that did not have a copy of an older version installed?
I have upgraded three times now, and each time the program appeared identical to a full version. The only indication I can see is that the box has a small stick-on label saying PEPE 7.0 WIN UPG IE DIR DV DIRECT. I presume the UPG is upgrade. Although each upgrade included a printed manual for Premiere Elements, I didn't get a printed manual for Photoshop Elements for either versions 4/6 or 7/7 although I did for 3/5. I don't know if the non-upgrade package includes the manual or not.
The CD/DVD case for the discs says DVS/A, PEPE, 7.0, WIN, GEN, WWE, whatever all that means. I presume PEPE is Photoshop Elements Premiere Elements. No mention or hint of upgrade.
Although sold at an upgrade price to current owners, Premiere Elements and Photoshop Elements have always been full versions of the program.
You may need to own a previous version to get the upgrade price, but you don't need a previous version on your computer to install the software.
There is no upgrade version, just an upgrade price as Steve said. the upgarde price from the Adobe web site, or the rebate.