Seams to be quite a lot of confusion there. Only last week Microsoft allowed me to install a OEM XP to a new PC, also they have told me it's perfectly OK to pass on an OEM version of a Works suite office program to another user, Providing it's been removed from my PC. :o(
HP Compaq do provide XP pr-installed to their systems with a restore CD, but also provide a sealed version of XP and all programs/drivers as well. Or they were doing up until last week that I know of, don't think they have changed their policy. j.
1) The OEM pre-install of Windows is generally specific to the model it is installed on. It will (or should) have all the correct drivers for hardware installed in your PC. The hidden partition will also contain any other pre-installed software, live PowerDVD or Nero. So to answer your question, if you can find the hidden partiton (using Partition magic to unhide it) you can then copy this to a new drive & hide it again, but I can't guarantee that your recovery CD will work on the new drive.
2) Kermit - you use a) the recovery CD that came with your PC, or b) if your HDD dies you take advantage of your manufacturers premium rate phone lines and book your PC in for a new drive, or c) find a dodgy mate with an "off-site back-up" of XP to help you out or d) dump windows altogether and get Red Hat Linux, more stable, comes with shedloads of software, and it's free (or very cheap)
That would be for XP Pro, where manufacturers are allowed to ship the CD. You see corporate clients (who would be the most likely XP Pro buyers) are more trustworthy, despite the fact that a recent survey found 80% of companies were using unlicensed software.
I have a local PC shop who are excellent in letting me have bits and pieces at very short notice and at cost + 10%. I therefore am in there quite a bit. They have literally a pile of XP Home edition disks waiting to be installed onto the PC's they build.
If it were "Forbidden" to provide the disks why the hell does Microsoft provide them in such large quantities for such retailers/small manufacturers. Surely, what they would do is provide a disk that would create a hidden partition and a restore disk?
No - full bundled copies of XP home are available in quantity - it is just the larger firms that use the restore CD method as it has a siginificant price advantage (to them).
Small builders do have access to disks, and are allowed to bundle them with the PCs, some large builders do as well (I think Evesham will give you an OEM disk if you ask for one) it's just that they don't get the fantastic discount that the large builders enjoy.