A recording partner/friend  is using an Octa-capture...back when he bought it, it came with a version of X2 Studio that he downloaded but never used because he was using (let's just say another DAW) at the time.
 
I've talked him into purchasing Sonar Professional....which, since he technically has the X2 Studio version, he should be able to get at the upgrade price.
 
But, he never registered the version, etc....does he need to install it first before being able to upgrade to the new version?  Or will entering the serial number somewhere on the cakewalk site suffice?

There is no need to install a previous version of SONAR to install the SONAR Professional upgrade. The SONAR Professional upgrade is the same product as the full retail version. This true true for all version of SONAR with the exception of the download version of the SONAR 8.5 upgrade which requires a prior installation of SONAR 8.
 
However, in order to receive an upgrade price, a previous version of SONAR must be registered.