I think it depends on whether or not you got the "clean' install or the Upgrade package. I know that on my new install version of Ultimate the upgrade option was not clickable. Which in a way is strange because if someone paid 100 or so extra bucks for the new install version when they wanted the upgrade, Microsoft should let them lol.
I'm interested in the response from the pro's because at one point I had the OEM version (which I think you have since it was pre-installed) and my understanding was that it had no Microsoft support AND it was not upgradeable. Since I found this site I don't give a big fat rats butt about the "official' Microsoft support, it pales in comparison, but I DO care about the up-gradeability (lol i invented a new word according to this sites dictionary) factor as I want to install Vista on my daughters computer and the OEM stuff is 1/2 at least as expensive as the "retail" version.
Sorry, I got off track, if you DO have the upgrade feature you shouldn't lose your files.