Do I break down or do I refurbish?

Originally Posted by Craasher

CLR Im not doubting you and I have realized recently that I have a lot more to learn about Microsoft licensing, so please don't take this as I am questioning your knowledge just seeking clarification. Are you saying that if I have an OEM disk for Windows XP, and I have a desktop that came with an OEM copy and has the COA on the side that its illegal (by Microsofts standards) to use that OEM disk and the original key on the COA? I mean that sounds perfectly plausible they way some of the other licensing stuff works it just doesn't make sense. Why do they care what disk is used as long as its a valid code?

I keep an OEM disk around specifically for this reason. Same way I keep a Dell restore CD for XP SP2 and Windows Vista. For a lot of my business customers after some time its easier to reinstall Windows than attempt to clean up all the junk they have installed and removed on their computer. I have been using my OEM disk and their original COA key.

Craasher to answer your first question yes it is illegal according to Microsoft if a PC has a COA and you use an OEM disk that disk not originally come with the PC. Microsoft cares because the install media is only to be used with the PC it was originally sold with. People will use one install disk and the COA's off of scrapped cases to install an OS on supposed "refurbished" pc's.
The only way you can use an install media on multiple pc's legally is if the install media is designated for volume key/enterprise use. This is how corporations will reimage 100's of pc's with the same image. The software was purchased and licensed for a volume install. The OS can only be installed on the number of pc's that the volume license was purchased for. If a company has a 100 pc's and they retire 10 and get 10 new pc's without an OS they are required to buy 10 more licenses of what ever OS they are using. It is similar to server licensing where you get a copy of the server OS but have to CAL's (Client Access Licenses) to allow users and devices to access the server.
What you are referring to doing with your business customers is not allowed according to Microsoft. If you were audited you would be required to produce an OEM hologram install disc for every client pc you have installed an OS on. Also volume license keys are not allowed to be used on multiple customer pc's. They have to be used within the company they were sold to. The customers whom you reinstall the OS for, you would be better off getting each one setup then create an image for each of them and install it onto a partition on their machine. Then all you would have to do is use your recovery tool to re-image the pc from the recovery partition and have them up and running within an hour.
Before we were a Microsoft refurbisher we did consulting and sold their software as a certified partner. There are so many hoops to jump through, but the risk is not worth it for us as a business to get caught doing it the wrong way.
Most of the refurbished pc's with OS that are sold on eBay are not legit. There was one of eBay's top sellers a few years back who grew from a one man operation to a 12 million dollar company that Microsoft shut down. They were selling 5000+ pc's a month and they could not provide proof that any of them had legitimate operating systems installed on them. Another common thing you see on eBay is people selling shrinkwrap oem install discs that have a product key in package. That is also illegal. These discs came with new machines from the OEM. The only legal way you can install this software is if you have the pc with the COA that has the matching product key affixed to it.