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what does PREINSTALLED Windows 7 mean?

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Preinstalled: Means it is already installed on your computer when you buy it, like most computers.

If it is already installed, I don't understand at all what you need to pay $150 for. It is already on there.

Now, if you mean you want to upgrade from Win 7 Home or whatever to Win 7 Ultimate, yeah, it'll cost you more.

If you have no interest in upgrading, you're already there. Done.