from Paul Thurrott from windowsitpro.com

Microsoft has also made major changes to the Vista EULA. Microsoft presents these changes as a clarification, but
various online pundits, analysts, and enthusiasts claim the changes will harm individuals and small business users because they further restrict user rights with regards to transferring Windows from one PC to another. In the EULA, Microsoft is also supplying its usage rights for virtual machines (VMs) for the first time.

According to the XP EULA, users who purchase a retail copy of the OS are allowed to “move [XP] to a different Workstation Computer. After the transfer, you must completely remove [XP] from the former Workstation Computer.” People have read this to mean they can do so as frequently as they want, and many enthusiasts, who upgrade major PC
components regularly, have pointed to this part of the EULA to justify using the same copy of XP repeatedly.

Microsoft says that the EULA clause mentioned above applies only to special circumstances, such as a hardware failure. So with Vista, they’ve clarified the EULA to state that a user might “reassign the [Vista] license to another device one time.” This, many believe, is a huge new restriction.

Regarding VMs, Microsoft is addressing the installation of Windows in a VM with the Vista EULA for the first time. According to the EULA, any Vista product edition can act as a host OS for guest VMs. But only the “premium” Vista versions–Home Premium, Enterprise, and Ultimate–can be installed as a guest OS inside a VM. Microsoft says this isn’t a
limitation because the only customers really using VMs are businesses and enthusiasts, and they’ll both be well served by this decision. More important, perhaps, a VM qualifies as a “device,” so if you install Vista to a VM, you’re using up one Vista license. You can’t install any versions of Vista–except for Enterprise–more than once. With Vista Enterprise, you can install up to four VM versions of the OS under the host OS.

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