Wrong. You need a separate license. Confirmed that with Microsoft regarding my Vista license.

I have a legal Vista license in my host computer. Installed another inside a virtual machine on the same host computer. It will run for a while then blocked. Called Microsoft and was told I need extra license.

So my guess is, once a copy is being used, Microsoft probably keep a log of that and will prevent a 2nd copy from being used.

But for XP, no such problem.