I went out to a pc show to grab a copy of Ultimate when first released but just missed the last copy then. So I went with the Home Premium edition and other then some driver issues on the new build here at first Vista hasn't been seeing the amount of problems XP has been lately.
You wouldn't necessarlty need to reformat the first primary to see Vista reinstalled fast. What is seen now however is all of the folders are stuffed into a Windows.old archive type folder when new ones are created. This allows copying anything out of your user name folder as well anything like screen shots in jpgs used for the desktop, custom wav files for assigning sounds to functions in Windows(can hear some good ones at times

), and other personal data out of program folders like photos taken with a digital camera or camcorder avi files, etc.
With XP you know the routine when those same Windows, docs+settings, etc. get the big "press L now to delete current folders" when going to "replace" the current copy installed. Then you have to manually copy things back into the new copies of folders or simply start fresh all over again.
Permanently activated sounds like a prepaid activation of some type. If it was something else you could seeing garbage rather then a normal working genuine copy which will meet inspection standards when going for updates where a Genuine Windows Advantage tool awaits you there. Even for XP that was a recent security measure by MS to fight piracy!
It sounds more like a prepaid option to upgrade to Vista rather then a full install version since you mentioned upgrading over XP. You would want a full install copy so you don't have to reinstall XP just to see a new copy of the old version upgraded to Vista.