Is it legal to use single Windows 7 (home basic) license to install windows on host AND on virtual machine running under Linux on the same host?
It will be physically different installations (different partitions), however in the same pc so they will never run at a the same time. Although frequent reboots between two could happen.
How to do activations in this case? Just install on
host -> activate -> reboot into linux -> install under VM -> activate?
This is rather sketchy ground, and no answers here should be accepted as completely correct. However, I will try. I'm going to be looking at Windows 7 Home Basic Retail, OEM will be different. And difficult, since OEM copies are often hardware locked, by license and/or activation method.
The Windows 7 Home Basic EULA has a clause specifically on virtualization (3. d.):
Note it says instead of using the software directly. Though this is rather vague, there are some discussions on such on the VirtualBox forums, one this one in particular explicitly states this is not allowed.
On a more thorough read, I also came across this clause in the same EULA (1. b.):
Hardware partition could mean physical drive..?
I would say you should not be running (i.e. have installed) more than one copy on the same Key at once. I will also reiterate that I am in no way a legal professional and any advice I may have given could be incorrect.