A supplier doesn't have a blanket license at a fixed price, but they do get a very cheap price per installation if they pre-install Windows on every PC they sell. That cheap price tends to vanish like a soap bubble at the slightest hint of the supplier selling any PCs with another OS (or no OS) installed.

Most suppliers don't actually have an installation disk per customer. Often XP is pre-installed from an image, maybe over a network and I've heard of hard disks being supplied (to dealers only, of couse) with Windows pre-installed.

And yes: if you want to install Windows on a second machine you are expected to purchase a copy for each. Windows XP product activation is supposed to prevent you from using multiple installations from the same disk.

It's actually quite realistic to buy an OEM copy of Windows. You can buy it at OEM price in conjunction with a qualifying piece of hardware, which doesn't have to be a whole PC (e.g. hard drive or memory). Then you can always be sure of installing it from scratch, even if your HD fails one day (it will) or the power supply goes haywire and trashes the whole installation (can happen).

Anahata