Whats the deal with oem licensing? Is it totally tied to the motherboard? What if I upgrade or it breaks?

The only part of the system that cannot be replaced or upgraded is the motherboard, otherwise the system is deemed new.

OEM licensing only allows you to attach a license to one system for life.

They will only make an exception if your system dies or something.  Under EULA OEM, if your motherboard goes, the replacement motherboard must be the same make/model or the same manufacturer's replacement/equivalent.  Of course that is interepreted by the system builder.

In reality its easy to transfer to another PC if you really need to, its just a case of what to say to the call centre monkey, they are working from a script as allways.

Its PITA more than anything else.

If you havent bought it though its worth waiting for the next version of M$ bloatware, shouldnt be that long in turning up.

Otherwise it seems to be as Cypher says, although I dont have the thing myself.