Q. Can I install OEM on a virtual machine (VMware)?
A. You may install OEM in a virtual environment as long as you have a separate license for each instance of the software. It is fine to use the OEM version as long as it is properly licensed. To be clear, a separate version of software must be installed for both the “standard” and “virtual” installations.
(from http://www.microsoft.com/OEM/en/Pages/support-faq.aspx ) So you can't use the same OEM license for both the host and the guest (which makes sense), but it appears that you can use the OEM license on the guest only. I have no idea whether once installed on physical hardware if you can transfer that license to a VM. Why do they make this so confusing?
interlard - vt., to intersperse; diversify -- Webster's New World Dictionary Of The American Language