If Leopard is an upgrade, that means it requires the user to own and have installed an earlier version of OS X for the install to work.
I don't agree with this. The fact that a piece of software is
licensed as an upgrade only does
not impose any obligation on Apple to insert any code that
verifies whether or not an older version of a product had previously been installed. It also does not impose any requirement that the boxed product must only contain an updater rather than the the full code necessary to install the product from scratch.
For example, consider the "upgrade" edition of Word Perfect X4, which, according to the license agreement, can be used not only by any person who already holds a valid license for any full version of Word Perfect since version 8.0, but also by any person who already holds a valid license for any full version of Microsoft Word since version 97. Obviously, since it is intended to be possible for people who already owned a huge variety of very different software, it would be impractical for them to release special software that is able to patch *any* of those various different programs and end up with Word Perfect X4 as the final result. Selling a piece of software that is physically capable of being installed from scratch, while contractually preventing the user from using it in unintended circumstances, is the most practical alternative.
In Apple's case, measures such as requiring a media check to verify that the installer already has a valid copy of the original installation disc, or making the upgrade disc only capable of patching an existing installation, would be redundant in any genuine Macintosh system, because the original license for the use of Mac OS is automatically conveyed with every piece of Macintosh hardware that Apple has ever manufactured. The fact the Mac OS X is only authorized for installation on Apple-manufactured hardware (and typically cannot be directly installed on non-Apple hardware without modification that is beyond the means of most inexperienced users) ought to be sufficient to ensure that it is only installed on hardware that is already eligible (other considerations beyond their control such as compatibility with obsolete CPUs set aside for the moment) for the upgrade edition.
I would think that, if the end user were to privately make modifications in software which render it possible to install Leopard on the original hardware of a Performa 5400, then they would be entirely within their legal rights to do so. Having done that, though, they may have forfeited their right to resell that Mac unless they wiped the hard drive first because otherwise they'd be selling an edited work which, according to the CleanFlicks precedent cited earlier, would constitute copyright infringement.
Having wiped the hard drive, I think they'd again be within their legal rights to sell the Leopard DVD, along with the wiped Performa, to somebody else under first sale doctrine which has been upheld in a number of cases where the EULA would have prohibited it. Then, somebody else would be perfectly within their legal rights to make the same modifications, and re-install the software again.