From Microsoft Licensing and activation info page;here:
http://windowshelp.microsoft.com/Windows/en-US/Help/62088be6-3538-46a6-99fb-05e74aeb48b51033.mspx
Quoted,
"How many times can I install Windows on my computer before I have to activate Windows again?
You can reinstall Windows on the same computer as many times as you want because activation pairs the Windows product key with information about your computer hardware. If you make a significant hardware change, you might have to activate Windows again.
Will I ever need to activate my current copy of Windows again?
Maybe. You might have to activate Windows again if:
•
You uninstall Windows on one computer and install it on another. During installation, enter the product key that came with your copy of Windows. If automatic activation fails, follow the instructions that walk you through activating Windows by phone. You will have 30 days to activate your copy of Windows.
•
You make a significant hardware change to your computer, such as upgrading the hard disk and memory at the same time. If a major hardware change requires activating Windows again, you will be notified and will have three days to activate your copy of Windows.
•
You reformat your hard disk. Reformatting erases your activation status. In this case, you’ll have 30 days to activate Windows again.
•
A virus infects your computer and deletes your activation status.
If you have to activate Windows again, you don't need to buy a new product key.
To activate Windows on this computer, do the following:
Open Windows Activation by clicking the Start button , clicking Computer, clicking Properties, and then clicking Click here to activate Windows now.* If you are prompted for an administrator password or confirmation, type the password or provide confirmation."
I have personally re-installed OEM and retail versions of xp and vista 8+ times per machine, and had to call only once because HP gave me a bad key and they sent me a new one.
I had to re-install that one a few days ago ('cause the sis-in-law is hell on an OS).
They understand people upgrade their machines and have in-laws.