According to Thurrott, the main difference between the Windows XP and Vista license terms is clarity: the Windows Vista license was re-written to make Microsoft's policy clearer and easier to understand, while the Windows XP license is a lot vaguer and only appears to leave room for unlimited OS transfers because it does not explicitly mention a limit. Thurrot goes on to quote Microsoft General Manager Shanen Boettcher, who says the transfer clause pertains to "specific circumstances" like a hardware failure that might force a user to transfer his copy of Windows to a new machine. Boettcher also says that both Vista and XP are licensed on a "per copy, per device" basis.
One change that has found its way into the Vista license is that Microsoft now explicitly addresses the issue of virtual machines. Only the Business and Ultimate editions of Windows Vista will be licensed to run as guest operating systems inside a virtual machine like Virtual PC or VMWare. Furthermore, if a copy of Vista is installed in a VM, its owner will not be able to legally install that copy on a physical machine unless he takes advantage of the one-time transfer option—"one license equals one installation," according to Thurrott.