The problem with traditional Licensing mechanisms is that they don't take into account that you might want to test both hardware and software under a lot of different scenarios.
For example say you have an XP virtual machine for which you have a legal XP license. You might wish to test all sorts of hardware and software configurations on this machine.
Typically the activation procedure will come into play if you make major changes such as change the CPU / memory size etc etc.
With a VM you can make a lot of these -- such as setting the VM to use a single or double processor, adjusting the main memory, adding SCSI devices etc etc.
Now although in general you CAN activate Windows many times (once you've tried explaining to those wretched off shored call centres what a Virtual Machine is -- they usually haven't a clue in any case) it's a real PAIN in the but.
Other companies such as ADOBE don't give you even that much leeway -- once you've used up say 2 or 3 activations of CS4 that's it.
Products SHOULD be licensed so that you can use them on a SINGLE virtual machine however you configure it.
Whilst of course you can "clone" identical Virtual machines - that's not the object of testing -- and in any case you can do this already.
It shouldn't be too hard to get say a "developers" license so you can test this stuff on a Virtual machine - you could even add a condition that you don't bring up more than one Virtual machine concurrently.
There's obviously Corporate type licenses - but I'm thinking of the small home users and hobbyists who also want to do some "tinkering".
(As an other issue since most people now have several computers at home wouldn't a "Home License Pack" make a lot of sense -- say your product could be used on up to 5 machines -- but that's also another issue).
By making it difficult "to follow the rules" and by being inflexible doesn't this just contribute to people finding hacks and get arounds and just essentially encouraging piracy when with a little flexibility most of the problem could be solved.