I have 2 macbook pro's, one is new and running Lion (10.7.2) and the other is from mid 2007. Is it possible/allowed to format the old one and install Lion from the new one on it?
i wouldnt put money on it working (not to mention any EULA implications of not paying for the upgrade), in my experience macs are EXTREMELY fussy over what disk is used to install the OS. use the original disk then upgrade from the app store would be my suggestion.
The install DVD with the newer computer is not the same as a retail disc. It may or may not work with an earlier computer but I'd say it probably will. Assuming the older Mac meets the hardware requirements for Lion it should install OK
Whether that's within the licensing terms of the OS is another matter
This is very true. If you try to use a bundled installer DVD older than the Mac it almost certainly won't work. Retail DVDs are different and should work with any computer that predates the installer, assuming they meet the hardware requirements
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