Vista OEM versus Retail

Arstechnica has an article explaining OEM (mainly the difference between the Microsoft Vista OEM and retail versions)

Buying OEM versions of Windows Vista: the facts

It seems that anyone who can install software is eligible to purchase a Vista OEM copy, without extra hardware.

Can I buy OEM?

Yes, you can. Microsoft licenses OEM software to "system builders," which the license defines as "an original equipment manufacturer, or an assembler, reassembler, or installer of software on computer systems" (emphasis added). You can install software on computers, right?

When asked, Microsoft says that OEM software is not intended to be installed by end users. Off the record, Microsoft spokespeople have told me that the big concern in Redmond is for Joe Newbie. They don't want inexperienced users buying OEM software, but the fact of the matter is that anyone can buy OEM versions of Windows.

Truth be told, Microsoft is not opposed to the practice. Rather, the company says that people who purchase OEM software will simply be expected to abide by the terms of the licensing agreements.