Hey Puppybreath, How are you? (other than with this problem..) I haven't seen you here in a while. (could I have been sleeping again?)
Anyway, to your problem. In theory, you are correct, it 'should' do that. But, form what I've seen and heard out of M$ lately, I would NOT count on it. Back-up everything to either an external HD or CD. (I said back-up, but copy every thing as well... meaning here the different formats, or extentions.) I really don't know if it will make any difference that M$ has declared your old version as 'Pirated' or not. ?:| With what they are pulling now, they could have planted a 'Bug' in your machine, :0 to ensure that you 'Bought' a 'new' version. If that is the case, it's wipe and re-install. :_| Anagin, that would depend on where you are, and which version you are useing. (That has been found to be 'Il'legal here in Europe, and in Germany especially. I had to find out the hard way, as it happened to me also. But M$ got nailed.)
As for the different key... yes to that. And, you must be on line to do so. (There is another way, but again tricky. PM me if being 'on-line' is a problem for you. I'll explain the stepps.)
I could write a book on this... (maybe I should ?:| ) but I think that you'd rather get on with it.
My tip would be, after you have all your date copied, and 'backed-up. Have a really good catalog of the programs that might / will be needed to be re-installed, including the sourses. (and web sites or CD's where they can be found easily) Is to do an install, let it walk you through the process, activate, and register, and in general do the 'Hand-shake' with M$. Than when it asks you if you want to bring your data into the system, do so from your (try the HD first, if it is still available, if not the CD's in which ever format it will acept) With any up-dates needed from M$, it should take about 4-6 hours, so leave yourself enough time to do it right. (will save time in the long run.) All together total time might take a whole 8 hour day. (and with-out interuptions)
I hope that helps you. If not maybe HAL will drop by. (or one of the other fine folks here.) or just PM me. -d