Just to stop a lot of these questions as well i will answer this in regards to XP and Vista.
OEM = Original Equipment Manufacturer. This is the software that is used by Dell, Hp and the rest and comes pre-installed on your pre-built machines. If you buy it from any online vendor it does not come with any boxes or instructions. It will be just the disc. NewEgg, TigerDirect, Amazon are just examples of the places you can use.
Retail = what you buy at stores like Office Max or Wal-Mart. There are other Retailers you can get them from. Office Max and Wal-Mart are just examples.
Windows XP OEM
This can be used to activate on 3 machines.
Windows XP Retail
This can be used to activate on 3 machines.
Windows Vista OEM
This can be used to activate 1 machine.
Windows Vista Retail
This can be used to activate 3 machines.
Windows 7 OEM
this can be used to activate 1 Machine.
Windows 7 Retail
This can be used to activate 3 machines.
Windows 7 Family Pack
This can be used to activate 3 separate machines. As it come with 3 serials.
*NOTE*
Just for even more clarification. OEM's are tied to that hardware. You can reinstall it as many times as you want on the same machine. But if you change mother board, the license is no good anymore. The License stays with the Mother board and dies with the mother board. This is the TRUE and full on agreement of the EULA with OEM licenses. The license is
NOT transferrable to any other machine at all. The software will not activate on another machine and it will require you to call Microsoft for activation. Now you can lie to them, but plain and simple, if you get the software activated on more than 1 machine, you are in violation of the EULA and using the software illegally. That is the truth behind the OEM EULA. There is only 1 exception to this. If you can prove that the mother board is faulty. Only then can you replace the mother board and not have to get a new License. More information available
here.
Now let me make this clear.
1 Serial = 1 PC.
Now what i mean by that is you can install the OS and activate it by the Internet on that number of machines. This can only be done
1 machine at a time. You can only have
1 copy activated and operating on the Internet at any given time to be within the EULA and terms of the license agreement to be fully legal.
That should solve your questions about the difference. Yes buying a OEM from a site like NewEgg is completely legal and can be used. The software can be reinstalled on the same machine a infinite number of times without using more than 1 activation.
It doesn't matter which you buy. The software can be used on any machine just like a regular OS. Being OEM just means that it is bought by System Builds are a discounted rate. Nothing more. It will act just like a regular version of XP or Vista without any extra software needed. It will install and load up just like any other OS.
As for any questions regarding if you can use your current XP OEM/Vista OEM on a new build they can not and will not be answered. They are considered against forum rules since it is technically illegal to do such a thing. Technically with a OEM Serial once the System is done being used, the Serial goes with it. If the mother board dies, the license dies with it.
Differences between OEM and Retail 
Linear Mode
