I have heard that even if you have an illegal copy of a MS OS on a system, as long as you buy a legit copy and keep that copy available if you were to be audited by MS, that they would allow for the install to remain on the laptop as if the legit copy was installed, but without having to go through a full reinstall.
This was part of the program that MS was doing for the people who installed XP to various systems and MS is giving the ability to come forward and without lawsuit pay for it even if it is a duplicate install.
What I heard some people doing to avoid buying OS's is raiding recycling plants for computers thrown away to grab the XP and Vista keys off of the sides of the systems and using those to install to bare bone boxes and that is not allowed even if the Keys were thrown away and someone found them useful for new system builds!!!! MS States that those systems of which Keys were OEM to those boxes have to remain in or on those boxes.
The loop hole here is that you could grab those systems and install a new motherboard and move the original CPU from that dead system into the new board and be legally legit with MS because they pair their OEM Keys that came with say your HP computer in reference to the computer case and CPU. You can swap motherboards and all other internals, but as long as the case and CPU is used with the key, you dont have to be the original owner of the system for it to be legit.
If you are the owner of a computer and the motherboard dies and you upgrade it and it was an eMachines for example, you can install the motherboard into that system and be ok, because you are the original owner of the MS software, so MS got their $$$$ from you. You may run into problems though activating the key though and you will have to express that you swapped motherboards and will be at the will of the India MS Activation as to if they will approve or disapprove the activation.