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Upgrade has been disabled - You must rename or remove Folder before upgrade can Continue
http://www.vistaarticles.com/articles/293/1/Upgrade-has-been-disabled---You-must-rename-or-remove-Folder-before-upgrade-can-Continue
By 
Published on 12/10/2006
 
You receive the following error message in the dialog box.

Upgrade has been disabled - You must rename or remove Folder before upgrade can Continue

Method 1

Rename the folder. To rename the folder, follow these steps:

1. Right-click <FolderName>, and then click Rename.
2. Type <FolderName>_old, and then press ENTER.
3. Restart the Windows Vista setup from your current version of Windows.

Method 2

Delete the folder. To delete the folder, follow these steps:

1. Use a backup program, such as the Backup utility for Windows that is included with Windows XP, to back up the folder. For more information about how to use the Backup utility for Window XP, click the following article number to view the article in the Microsoft Knowledge Base:
308422 (http://support.microsoft.com/kb/308422/) How to use Backup to back up files and folders on your computer in Windows XP 
2. Right-click <FolderName>, and then click Delete. 
3. Click Yes on the Confirm Folder Delete dialog box. 
4. Restart the Windows Vista setup from your current version of Windows.