Vista Business x32 - Vista Ultimate x64 upgrade issues

Hello people! I am having quite the time over here with a Vista machine of mine and I honestly think it's out to get me. My job is computer support for my college campus and I would like to think that I am fairly good with computers. With that said, let me give you a rundown of the situation :

The computer is an Optiplex 755 (with standard core features) that has a BFG 850w power source, 8 gb RAM, and a nice Nvidia GTX card. I am running Vista Business x32 on it and finally decided to take advantage of all of my RAM, so I bought Vista Ultimate x64 (Red Edition if that helps) and popped it in. It said that it could not read the media (and I read the MS article on why that was so) and then decided to boot from the disk. I did so, and got fairly far up until I had to select the drive. I selected C, and then next to the "Next" button, I got a funny message that read:

To use the product key you entered, start the installation on a computer that is running a genuine version of windows.

For the record, I purchased this computer/OS is the most legit way possible (through my college). I am stuck in what would appear to be a Catch 22. It's asking me to install it via a method that just brought me to what I am staring at now. This situation quite honestly, is beyond me. I have already taken out all my RAM, save 2 GB, and all the PCI cards, save the GTX, like other guides suggested and that doesn't seem to be working. If you need any more information other than what I have supplied, do tell and I will give it to you. Thanks for the help!

Isn't the red edition a cracked copy?

Either way, go out and purchase a standard 64 bit Full version of Vista, wipe everything and do a clean install. Then back up the registry with Erunt, and do a complete disk image with Macrium Reflect Free once the updates and drivers are installed, as a backup, if those installs go smoothly.

Just for quick clarification, the Red Edition is certainly not cracked! I bought it at Best Buy (ran me $200+). This is what it looks like.

With Red Edition, Microsoft contributes to raise awareness of AIDS in Africa.
Since this is from a university, do you have a license server (we do)? The catch is we have to be on campus (using 128.163.x.x) or use VPN to campus to register the OS.

Is this a full or upgrade edition? Are you sure your processor will support x64? If it's a full edition, could you delete and add the partition and try again? Can you test your DVD reader? Just some thoughts...