There was an interesting article in PCA a couple of months ago, where Microsoft commented on their licencing policies. If I understood it correctly (and I think I did, as I read it through a few times as I didn't believe it the first time), their policy was One Operating System, One Computer. When the computer died, the operating system could not legally be transferred to another machine - a fresh licence was required.
In this case, the only question is whether the computer has died (by having its' OS replaced by another, albeit still from MS) - the original stance that the old OS still cannot be transferred to another machine would appear to hold.
I don't know the answer to this - logic would say that as you own the rights to use the software, then provided it is only installed on one machine then legally that should be OK. After all, that is the case with most software - you can usually use it within the terms of your software licence on more than one machine, provided that single user copies are only installed on a single machine at any one time.
However, that is logical thinking. After reading the article in PCA, I have come to the conclusion that it dangerous to think logically where Microsoft are in the picture. It would be interesting to have an expert view on whether their single user policy constitutes an unfair contract term (and abuse of monopoly position?)