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in program file\esri\etc\ .. where have you soc machine have a new license for ags 10 file?
Got the problem resolved shortly after the thread was posted, had to re-uninstall everything and i manually went and removed all of the left over files and folders related to esri. apparently something got left over from 9.3.1 after the uninstall.
hope this helps others who are having trouble doing this upgrade