Nothing stopped me.
I bought LR1 and upgraded to LR2 and upgraded to LR3.
It just needed a valid serial number from the previous version.

So I have to keep my version1, 2, and 3 CDs if I need to re-install.
Tested that process on a new laptop and it worked, so I know if I need to reinstall on a new system it's a little hassle, but it works.