Yes, we tried that. Still does not have an option to save it as ISO or on backup media. Interesting though..when I use MY key and follow those instructions it DOES give me the option to save as an ISO. So, I am still under the belief that if you buy the $14.99 upgrade, you will not be permitted to create a backup ISO or backup media.
As far as I know, the only thing Microsoft has changed for the $14.99 special is that they now require you to enter the product key number from the COA sticker on the new OEM Windows 7 computer to prove that you qualify.
Okay. I just did this again but on a different PC than I downloaded Windows 8 on my friend's PC. Using his key I was able to save as ISO. BUT, I know when we did it on HIS Windows 7 system, it did not have the option. Hmmm. I think I remember we downloaded the Windows 8 upgrade tool and when we ran it..it asked a question like "Upgrade Now?"..or something like that. He answered YES because he read it too fast..but I said it probably wasn't a biggie. I was just wanting to download it to burn the ISO so he can upgrade it later. And when it came up it had only the options to Install Now, or Install Later from your desktop. There was NO option to Install later from media. We tried to re-run it again and had the same issue. So, yes, I gave him a copy of my ISO. Weird...but thanx everyone.
Ahhh.. I think I figuired it out...we did not do this from his Windows 7 computer..we did this from his XP computer. I just looked at several other forums reporting the same problem and they all say this is an issue on Windows XP. It will not give you the option to "Install later from media" in Windows XP. At least that is I am reading from several other bloggers. He has two PC's at his workstation..an XP machine and Windows 7 machine. Yup, we did it on his XP machine. Now it makes sense...