Activation Question

hello all,

I have done many formats over the years but this issue is the first time that i have come to wonder, "how does a pc/microsoft know when you have formated an OS and the product key is free again for use?"

So to get to my issue.. i have had a pc for a few years and recently i bought a new one. i want to install the same OS witht he same product key to the new PC. when i tried to activate it told me that the key had exceeded is uses and i though "oh snap.. i still have it on the old pc".

Lets say i just wipe clean my old OS.. lets say i toss the hard drive from a waterfall ( so to speak ). will i then be able to get my win7 key to be usable again? or do i have to install a different OS on the old pc? ( or am i doomed?)