The seller should sell it pre-installed onto a computer. However, they can get around this by selling it with a piece of hardware (eg a memory stick) and say that is what it has to be installed on. You can legitamately buy an XP OEM license, install it on your computer, put the license sticker on your computer case, activate it, register it and all will be dandy. Microsoft will be happy and the license police will be happy. When it comes to retiring the compuer, the license is still with that compuer: You can't uninstall it then put it on another computer. The license dies with that computer (which is why it is cheaper).