In a nutshell the copy of Win7 home I'm running right this moment is not activated I can't activate it as I reached my install limit. I want to upgrade to Win8. Will Win8 upgrade this copy of Win7 even though its not a "genuine" copy of Windows? or am I going to be forced to pay for a Win7 product key just to get Win8 to upgrade?
Win8 won't care if it's activated or not, it'll just install overtop and do an upgrade, you'll be fine.