I just had a look at the windows site, I now actually understand what its all about.
It appears I was a bit nieve.
In any case, if I purchase windows 7 in october, will I have the same problem I am having now? Or will I be able to upgrade from XP to 7 just like any other OS.
And no, he did not charge me for it. He just gave it to me and said to try it out.