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How does Windows 7 licensing work for running the OS as Virtual Machines?

Is it legal to use the same Windows 7 key for a guest OS on a host with same key. I mean physically speaking, it is the same machine.

Does the licence discriminate virtualized hardware?

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marked as duplicate by Kez, studiohack Mar 27 '11 at 20:48

This question has been asked before and already has an answer. If those answers do not fully address your question, please ask a new question.

Also see serverfault.com/questions/53380/… over on serverfault for some more info :-) –  Kez Mar 27 '11 at 20:49
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up vote 2 down vote accepted

No. The license covers running one installation of the operating system. Running a VM of Win 7 inside Win 7 would constitute two installations.

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