A Windows XP license can only be used on one (1)
computer. A second installation requires a second
license.
From the Windows XP EULA:
1.1 Installation and use. You may install, use, access,
display and run one copy of the Software on a single
computer, such as a workstation, terminal or other
device ("Workstation Computer"). The Software may not
be used by more than two (2) processors at any one
time on any single Workstation Computer.
Please read your End-User License Agreement by going
to Start > Run and type: WINVER , and hit enter. Then
click on "End-User License Agreement".
If you already have a retail copy of Windows XP, you can obtain
additional licenses for another computer or laptop by visiting the
following Microsoft Web site:
http://shop.microsoft.com/special/wal/walinfo.asp