Hello,
Since I am a student I can get a discount on Microsoft Windows 7 Professional Upgrade 32/64-bit (English), for £57 however I am a bit unsure with the "upgrade" bit, does it mean I cannot use it unless there is a previous windows installed?
Yes, the upgrades need an valid existing version of Windows on the machine that is to be upgraded to Win7, eg generally it'd be XP or Vista.
The upgrade packages are generally cheaper because they know you already have a valid Windows OS on your machine