I don't think the disk itself has a limit,whether the disk is original copy or a copy of the original. I thing Angel said it correctly, the activation is based on the product key and a reference to that number in MS data base.

This is nonsense because to bypass it you can install XP, activate it, and before installing any other application, make a backup copy on a CD. That way you do not need to reinstall it another time, just copy it from the backup disk which has already an activated installation.

This is a theory. It needs to be proven by someone who has the time to play with it. I will be interested to know if it works.

I don't think MS can prevent you from making an authentic backup copy of your installation, I could be wrong though considering that this is a legal matter.