Instant, you are correct. More information is coming out about this and it seems that you have a total of 3 installs available (including a transfer to a third party.)
From what I have been reading though, MS is really going to lock down activation.
Let's say you buy a low end-ish computer, one you think will be able to handle the "Vista experience" and you later decide you really need to upgrade, you will be able to install vista again after you have upgraded, but you are stuck with that upgraded computer forever, unless you buy a new license.
From the MS pov, this is a great thing and a bad thing. There are those who will just go ahead and keep buying the new licenses and MS makes tons-o-bucks. However, this could push folks over to the alternative OS that they have, to this point, just been playing with.
I personally think this is a really bad idea and I hope MS changes their tactics. It's not a good PR move on their part.
I have to scrimp and save to upgrade my computer. I really can't afford to repurchase licensing also, specially at those prices.
Seems as though the only options here are to stick with XP as long as possible and let Stardock handle the innovation (suckup/ as they do so well /suckup
; buy the most computer you can afford, get Vista and ride that out for 5 or 6 years; or go with Apple or Linux or some such OS.
To MS: Good luck with that. To all the users: May Bill have mercy on your souls.