Ah, that explains why there are different products. The upgrade is "cheaper" because you had bought a previous OS whereas the full installation does not require a prerequisite purchase, thus more expensive. Lame. Basically, it seems like what's on the disc is the same, one just requires some additional verification in order to be cheaper. Pardon my ignorance earlier -- haven't installed Windows 7 yet myself. I'm waiting for a price drop on SSD's and then buying them together.
The upgrade is basically MS saying "we recognize you bought from us before, so we are gonna give you a price break to get our newest OS" and You can do the same workaround I said before with Vista.