MS admitted that their distribution was flawed, here is the ISO that they are offering instead of the exe and box setup.
http://msft-dnl.digitalrivercontent.net/msvista/pub/X15-65733/X15-65733.iso
Here is the link with the information pertaining to the iso fix
http://gizmodo.com/5391268/microsoft-fixes-windows-7-student-edition-upgrade-problems
http://msft-dnl.digitalrivercontent.net/msvista/pub/X15-65733/X15-65733.iso
Here is the link with the information pertaining to the iso fix
http://gizmodo.com/5391268/microsoft-fixes-windows-7-student-edition-upgrade-problems