Vista - Unauthorized Change to Vista

My daughter is having problems with her laptop. She is using a HP DV5135NR that was originally supplied with XP Pro. It was successfully updated through SP3 the I upgraded it to Vista Home Premium through Microsoft store.
At present it will start but goes to Error Recover screen. It will boot in safe mode but not with Networking. When booting to Normal Startup it gets a screen asking for Product Key again. Once it is keyed in and Next is selected it just sits, never goes anywhere but eventually will reboot and comes back to the same screen. There is an option to go online and activate. When selected it opens explorer but never connects.
Basically the computer is non functional until I can get it to boot to something.

Any suggestions.

Thanks in advance