There is little difference in downloading windows from a web torrent (or from Microsoft's own download site) and making a copy than borrowing the disk from a friend and making a copy, or calling a computer support guy to reinstall your PC from his copy.
As long as the license you have purchased is legitimate, and matches the type of installation media (retail, OEM, Volume license, regional versioning etc.), and the edition of windows 7 you install is the same, there is no problem with activation and remaining genuine.
Software, BIOS and Product key hacks and cracks are where the piracy comes into the picture, and Microsoft is actively promoting it's own "antimalware" products like Microsoft Security Essentials and the Malicious Program Removal Tool in Windows Updates, in order to monitor and counter the loss of revenue. At the same time, Microsoft is watching MyDigitalLife and other sites, and if their "utilities" get too well known, then they will go the way of Winternals and Sysinternals, and be bought into the Redmond machine.
Microsoft has fairly clearly outlined where it is going in the OEM market - 64bit mainstream products to cut off XP diehards, basic, hobbled OS editions installed on OEM machines, with the potential to buy instant anytime upgrades, and virtualization of Microsoft Office - it's tempting to know the full product is waiting on the disk, while it allows you to use some of the Word and Excel features if you watch Microsoft advertisements all the time.
I would not be surprised if Windows 8 is completely virtual, running in a virtualized protected workspace, like the starter versions of Office available now. If the VHD gets screwed up, just unpack another copy, and it will find your applications, configuration settings and documents automatically, and be back to work in 10 minutes.
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