Hey there, I bought a netbook recently which came with Windows XP on it... but I installed Linux on it since I only use it to check email and stuff Linux works great. No windows required. I also bought a desktop from Dell with no OS preinstalled, and am currently running Windows 7 RC on it. I was wondering if I can legally use my Windows XP license that I got with my netbook, on my desktop (and remove it from my netbook) and then avail of the Windows 7 upgrade (which is 50% off right now). I read online about people getting money back from Dell after removing Windows from their computers because they did not use it. So this should be possible right? I know this is a very specific Windows related question, but I thought some people here would probably know the answer. Thanks!

Generally, no. You can get your money back for the license, and then go out and buy a new license, but as far as I know what comes pre-installed is a one shot system license except in rare cases. It can not be transferred to a new system, and can even have problems if you upgrade too much.