Got it working now so thanks for all suggestions.
Something about USB Dongles always makes me poop scared. Now this particular USB Dongle have 30+ licenses on it.
So experimenting with options is a nightmare when it comes to this 10 Yen plastic hardware.
The USB Dongle was already behaving odd with all kinds of errors when running maintenance.
The USB Dongle errors was due to lack of writing permission in C:/ProgamData/eLicenser on Win 7.
Got it working by giving all users Full Access in Security for that folder.
Pheew my Dongle was not screwed up after all, so i took the chance and opened the Cubase 4 to Cubase 6 update version box . Nothing new in there, just the usual stuff with activation codes.
I then moved the old Cubase 6 license to an empty dongle, ran the activation code for the new Cubase 6.
Control Center found the old Cubase 4 and told me that i was entitled to a license 6.5 update. Then followed a link or two to get to the grace period download for 6.5.
Downloaded 6.5 and installed it and everything is working. Thanks to you guys, otherwise i would not have had the stomach for experimenting.
/Michael