Right.
Follow these steps:
1. Install Windows 7 without CD key(which ever edition you like leaving Starter). To install without CD Key just click on next button and click no on the dialog box which it will ask you.
2. After installation make sure you have the required drivers to at least connect to the net.
3. Insert an OEM SLP key for your edition eg this one in this site
Windows 7 OEM SLP Key Collection
After that
Install update KB971033 which is also called as WAT update.
4. After installation do a Reboot.
5. Go to Ms website for checking whether you have a Genuine Ms Product.
6. During the process of Validation(it will take sometime to complete). it will say that you dont have a Genuine product.
7. In that same window i.e. below it will tell you to purchase a genuine product online which is much lesser than the product available at the local stores.
8. Follow the steps on the Ms website and Voila you have purchased a Genuine Product.
It is the same RETAIL product and MS will ship you the box after the Purchase is complete.
That's it.
PS: I hope I dont get warned or banned for the above link