New Win7 in fact is using XP's CD-key, if you don't have any key to start with, you can't install upgrade version. At least that was the plan and the reason to release upgrade version.
In fact you can make Win7 install CD an universal for any version and any type, but you still need to have a true CD-key.
Some OEM XP doesn't need to input key, but that doesn't say there is not any.