<<Someone will correct me if I'm wrong but as far as I'm aware once you buy a key you can install it anywhere you like as long as it is only installed in one place at any one time and you use the correct media that correspond with that key...>>
. These are readily available with the license or can be found on the Microsoft website
The most basic types of licenses:
a. Volume licenses. Provided to a business or enterprise, allows them the right to install XP on a number (volume) of systems. See article at http://en.wikipedia.org/wiki/Volume_license_key
b. OEM licenses, there are 2 types:
1. Licenses sold to individuals who put together systems for their own amusement (like many forum members) or for resale to others (individual users who put together systems on a custom basis or for resale).
These licenses are now called System Builder licenses, where before they were simply known as MS OEM licenses. These licenses can only apply to one system and are not supposed to be moved to another system when that one dies, etc.
2. Boxmaker (Dell, HP, Gateway, eMachines, Acer, etc.) OEM licenses. These licenses can only apply to one system, the system exhibiting the tag from MS with the license/key.
Since boxmakers have managed to avoid providing an install CD for XP to many of their customers...their use of recovery partitions/CDs also serves to reinforce the fact that the install of the O/S cannot easily be moved to another system or hard drive.
c. Retail licenses. These are the only licenses which can normally be transferred to a different system, but the install cannot be duplicated on two different systems using one license.http://www.microsoft.com/windowsxp/eula/home.mspx
I believe that the update licenses are considered to be retail...don't know, I've never owned one.
The most important principle behind any license: One key allows for one install on one system at any time (since volume licenses are a special category). I own 8-10 licenses for XP Home...I can use those licenses on a maximum of 8-10 systems at any single point in time.
As for OEM licenses not being moved to other systems or newer components...I personally find that there is little difficulty obtaining valid activation after upgrading a component (such as a motherboard) or upgrading a system so much that it becomes a new entity. That is said from the perspective of one who has upgraded components and who was willing to obtain a new license...if such decision had been mandated by the PA mechanism.