Originally posted by: Pirotech
Yep, I meant 'upgrade' exactly, i.e. I had an XP version and also had a free Windows Vista upgrade, so that I didn't install Vista on top of XP. I guess, bigdaddy51 is right in his explanation.But what about backup archieves?
Generally speaking, I could simply restore the image of my old XP on the other computer and use it as well. True Image allows me to do this. Or this operation would be the same illegal? If so, why True Image has this feature?
You trade in your old car for $2400 off the purchase of your new car.
Then you drive your new car home, come back to the car lot, jump in your
old car with your spare set of keys, and drive it home too.
Is that ok?

No, and you see why: you got a discount on the new car because you gave up your old one. If you didn't want to give up your old one, you got to pay full price for the new one. Same with licensed software when you're doing an upgrade. If you aren't cool with giving up the previous version, then buy the new one at full price and you can use both at once.
Also note that OEM WinXP isn't supposed to get installed onto another computer after it's activated on the first computer, so if your XP is OEM (with a sticky COA sticker that says OEM on it), you aren't supposed to move it to other computers at all. That's why it's so much cheaper than full-retail XP.