I agree with the clean install, but my laptop holds a pretty extensive .NET development environment (vista), and wiping it isn't a real option.
I only have one partition, but I get:
To upgrade Windows, the Users, Program Files, and Windows directories need to be on the same partition. Upgrading when these directories are not on the same partition is not supported. Moving these directories so that they are on the same partition is also not supported. You can choose to install a new copy of Windows 7 Home Premium instead, but this is different from an upgrade, and does not keep your files, settings, and programs. You’ll need to reinstall any programs using the original installation discs or files. To save your files before installing Windows, back them up to an external location such as a CD, DVD, or external hard drive. To install a new copy of Windows 7 Home Premium, click the Back button in the upper left-hand corner, and select “Custom (advanced)”.