With Windows 7, like (almost) all Microsoft products, the residential EULA permits installation one one machine at one time only. In the past, of course, people just completely ignored this and made multiple installations.
In an effort to get round that, Microsoft introduced activation. That is, you can use the software for a limited period or a limited number of times before you must activate it against its licence key. That way, they can tell if you've installed it more than once. Of course, you may need to do this perfectly legitimately if e.g. your computer breaks down and you buy a new one.
So, chances are you'd get away with it.
However, there's nothing to say that in Windows 7 they now check your licence key over the Internet every time you use it.
Depends how you feel about contravening their EULA, at the end of the day...