Interestingly, Microsoft does allow such use for the two high-end (read "more expensive") versions of the OS. That use, is limited, however. The say:
If you do so, you may not play or access content or use applications protected by any Microsoft digital, information or enterprise rights management technology or other Microsoft rights management services or use BitLocker.
So you can't use DRM'd content in virtual usage. Hmmmm. Who'd want to?
Why is Microsoft making these provisions? What are they afraid of? After all, if you buy a copy of Vista, you SHOULD be able to run it anywhere you darned please, as long as they get their money and you only run it on one machine, what business of theirs is it that you're running it in a virtual machine?
What they're afraid of is "ghettoization." When users start running Windows in an emulated or virtual environment, that implies that they are using another OS as their main OS. That means that Windows has become a footnote in the history books, because it's being run as a "guest" in another OS. The same way that Windows itself allowed running DOS programs in a window and Mac OS X allowed you to run OS 9 applications in Classic.
The endless delays, the bugs in the beta releases, the numerous code rebuilds, the dwindling feature set all say that Vista is probably a disaster in the making and that Microsoft's star probably is starting to fall. These license requirements say that Microsoft knows this, and wants to try and keep their monopolistic hold on the PC industry.
Michael Dell himself has said that he would load Mac OS X on Dells if he could. Bill Gates got out of the captain's chair when the Dept. of Justice was ferreting out all the violations of the Sherman Anti-Trust Act that Microsoft was guilty of. Now he's totally separated himself from the company to do charity work. Gates is a lot of things, but "stupid" isn't one of them.
We are witnessing the beginning of the end for Microsoft, I believe. It may take 10 years for it to completely collapse, but it will happen. The future belongs to unix, that much is clear. Windows just can't compete with the stability and security of unix; whether it's Mac OS X, linux, or another flavor is irrelevant.
The king is dead. Long live the king.