7” Touch Screen - rotate screen issue

Just to add to the confusion:
I downloaded NOOBS 1.4.2 yesterday and put it on a SD card.
Initial run has to be done with a HDMI or Analog display connected in order to install Raspbian.
I had both connected and the 7 inch display remained dark.
On first boot, the HDMI display showed the initial rainbow and then the NOOBS 'press shift' to enter recovery.
Then Raspbian booted on the 7 inch display. Of course upside down (RPi2 HDMI/USBpower/AV connectors at top).
Added lcd_rotate=2 to /boot/config.txt and rebooted (no HDMI connected).
Note that the Raspbian FAT32 boot partition is the 3rd partition on the SD card. The first 2 are for the NOOBS recovery.
Raspbian came up right side up on the 7 inch. No initial rainbow display, since that goes to the HDMI.
My guess, you are using an older version of NOOBS. This one (1.4.2) includes the 25.09.2015 4.1 kernel and boots straight into the desktop (=Jessie).
Curious to know what the explanation is.