I'm going to buy a 'barebones' PC system ,which is a motherboard, processor, RAM, power supply, fans and case. I will probably put my old hard drive in it along with a new one, old one will be formatted of course. Components from my old computer will be used, and it will not have XP on it anymore. My question is if in install XP on my new machine will I have to pay for it again? I ask this because I believe that XP's product code is slaved to particular machine, thus it cannot be used on any other.

to my knowledge, at least I think this is the case, you can use your copy of xp on more than one machine. The serial code serves one purpose - to ensure youre using a legit licensed copy, although it might also provide a means of ensuring microsoft endorses and supports your product too.

Bottom line is, just give it a go - it should work. My Pc is a cloody bunt, i mean shiddy shid shid - my recovery CD is buggered heh.

hope that helps.
regards
Tonez.

There are several difference license types for Windows XP

Retail license: What you get with a box set, this license comes with no restrictions, except for the fact that it can be used on only one device

Upgrade license: Similar to the retail license, the upgrade license allows you to install Windows as long as you own a qualifying Microsoft product already. You can do clean installs with an Upgrade license.

Volume and Academic licenses: These are used in very specific circumstances, and probably won’t apply to you. A Volume license enables the same key to be used on multiple devices, and does not require activation. An Academic license requires that the product not be used in any sort money making endeavor.

OEM license: What you get with new machines when the product key is affixed to the case. An OEM license pairs with a device, and in theory, can only be used on that particular device. There is nothing to stop you from using it later on a different machine; however, you may not be able to activate it online. If you talk to a customer representative on the phone however (by ringing your region specific number as displayed on the activation dialog in Windows), you will be asked why there is a significant change in hardware. You could answer anything you like, in theory, such as “My manufacturer had to change the motherboard”, which constitutes completely legal usage of an OEM license, even if it’s completely untrue.

I am Microsoft accredited, so I bare the responsibility of telling you that you are legally obligated NOT to answer that way, as it constitutes a breach of the End User License Agreement. I am also bound to inform you however, that Microsoft has strict privacy policies, that prevent any sort private investigation (i.e. without court approval) once you confirm that you are indeed using the product legally.

I hope this sufficiently answers your question