Place these 2 .inf files into the same directory where you unpacked the OEMSR2 setup files.
Allow the layout.inf file to overwrite the one that is already there. (if you want make a backup of the
origonal one first but make sure setup cant find the origonal.) You can then run the install from Windows
or Dos as an upgade.
What the files do.

Layout.inf
One line is changed in the Layout.inf file to keep setup from unpacking and using
the unmodified setuppp.inf file from the precopy2.cab

Setuppp.inf
The producttype= line is changed from 9 to 1 (1 indicates an upgrade and will let it install over an older
version of win-95 without having to delete or rename Win.com) 
it also keeps it from asking for a serial# or cd-key. 

One final note: 
I cant take credit for this fix as I found the instructions for extracting and modifying the files in
another posting. But I performed the changes on my copies of the 2 files and used them to Install the
upgrade on my system. It installed from the Windows Control panel (add new application) without
any problems and is running fine. Below is a copy of the actual instructions I used to fix the files.

========================================================================================================
This method is more difficult and should only be attempted by highly
experienced users. The advantage is that while Method 1 is a "trick," this
method actually changes OSR2 to an upgrade version. Method 2 is courtesy
XXXX XXX.

Prerequsite: You must have at least 100MB free. You will be copying the
/Win95/ directory from the CDROM to your hard drive and installing from
your hard drive.

1)      Make a temp directory on a hard drive - call it Win95.

2)      Copy the Win95 directory from the CD to the new directory on your
hard drive.  From here, we work with the files on your hard drive.

3)      Extract from PRECOPY2.CAB the file called SETUPPP.INF.  Note: MS
has a CAB file extraction tool available as a PowerToy on their WEB site.

4)      Open LAYOUT.INF in a text editor.  Search for "SETUPPP.INF".  You
should find: setuppp.inf=2,,4550

        Change the 2 to a 0 to read:

        setuppp.inf=0,,4550

        Save the changes..

        This prevents the installation from extracting SETUPPP.INF 
        from the CAB file and use the file we extracted instead.

5)      Open SETUPPP.INF in a text editor. Search for "ProductType".  You
should find: ProductType=9

        Change 9 to 1 to read:  ProductType=1

        Save the changes...

        This apparently tells setup that this is an upgrade.

6)      Run SETUP from Windows95 off your hard drive.  Installation will
proceed as an upgrade.

NOTES on ProductType=X:

	ProductType=1:  Upgrades without asking for CD KEY (serial number)
	ProductType=2:  Asks for 10-digit CD KEY
	ProductType=3:  Wants a floppy install - doesn't work.
	ProductType=4:  Fails - Error - previous ops system installed.
	ProductType=5:  Works - asks for CD KEY, but won't take valid keys
		- can "ignore"
	ProductType=6:  Works OK (?) (?)
	ProductType=7:  Fails - Error - previous op system
	ProductType=8:  Fails - Error - previous op system
	ProductType=9:  OEM non upgrade version:  Asks for OEM certificate
		number.