Microsoft has just relaxed license requirements for Virtualised machines running Windows
Datacentre. Looks like the new Windows Server Datacenter Edition licenses (from October
1st 2006) will allow unlimited instances of Windows Server machines without the need
for an additional license. This area has become more and more contentious as multi-core
processors and multi-processor machines have made existing license agreements more
and more nebulous.
Read more about it here
on the The Register