There was a flurry of emails in the office over the last few days as the news of a new licensing policy that takes 'virtualisation' in to account, thus reducing the overall cost of server licensing to customers that use virtualisation to consolidate their servers.  Up until now Microsoft treated virtual machines like regular hardware in terms of licensing.  However, we have just introduced a new policy for Windows Server 2003 R2 Enterprise Edition that allows customers to run up to four virtual instances on one server at no additional cost.  The plan is to go even further with the Datacenter Edition of Windows Server "Longhorn," (next version of Windows Server), by allowing customers to run unlimited virtual instances on one server at no additional charge.

As seen on: http://www.microsoft.com/presspass/features/2005/oct05/10-10virtualizationlicensing.mspx