Sorry to hear this. Another reason to switch to Linux. We wished to install Windows 7 on the wifes machine with her recovery disks so she could test software out before installing on her host machine. I figured it would not work but we gave it a try any way. Windows is a lame OS.
Thanks for the info..
You can't usually install an OS from the recovery disks (quite apart from the licensing requirements). The recovery disks are aimed at installing on the exact same hardware as the purchased machine. They will usually not install on different hardware, and a virtual machine certainly has different (emulated) hardware. That means the installation will not work even on a virtual machine running on the original purchased machine.