So if you're building up your own PC, you have to make a choice as to which version of Windows you have to buy. Legally, you're only supposed to load an OEM copy of the software onto a machine with new hardware that you've just bought (motherboard or hard drive) and keep it on that machine only. If your motherboard fries and you put in a new one, the system prompts you to activate it - most people just choose to reactivate it, since the assumption is that they bought the license and that its fine so long as it stays on one machine. Unlike DSP versions, which cannot be re-activated no matter how many times you try to activate it, OEMs can be reactivated so long as they stay on the same machine.
The downside to this is that the full-fat versions, the retail boxes, don't have this limitation in the EULA, yet the software and activation process remains the same. Since many people don't want to pay extra for the boxed copies, they buy the OEM versions to save money and ignore the EULA flat out.