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TSF Team Emeritus, Microsoft Support
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There are 3 types of Windows XP versions:-

Retail version

Upgrade version

OEM version

The retail version is the most expensive, but you should get some support from Microsoft included, and if at a later date you want to transfer it to another PC (having removed it from your old PC) things should be fairly straightforward.

If you buy an OEM version (Original Equipment Manufacturer) then strictly speaking the license agreement ties it to the machine it is initially installed on. So if later on you buy another PC thinking that you can uninstall your OEM version of XP and install on the new machine, it may not be that easy.

Even making a major hardware change on the original machine can trigger a new 'validation instruction'.

The upgrade version makes a check that you have evidence of owning a 'qualifying product' for an upgrade discount.
 
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