That Register article seems to be a re-hash of various things printed elsewhere - in particular the argument that seems to be going on between Ed Bott (
http://blogs.zdnet.com/Bott/) and Paul Therrot.
There seems to be various MS representatives giving interpretations of the meaning of the EULA that differ from how many people would interpret it (if they can make any sense of it at all). Lots of confusion when it comes to virtualisation and which versions allow you to do what.
I see that Newegg has started selling OEM copies of Windows XP that come with upgrade vouchers to Vista. There's a diagram showing how it works:
http://promotions.newegg.com/microsoft/vista/TechGuarn.htmlI'm not sure I understand how MCE qualifies for a "Free" (+s&h) upgrade to Vista Home Premium, but XP Home costs $49 to upgrade to Vista Home Basic or $79 to Vista Home Premium. It makes MCE the more attractive option at only $20 more than XP Home (this is for OEM) - perhaps that's the point, shift more copies of MCE now knowing that most people won't use the upgrade.
All a confusing and pointless mess.