>I own Windows 7 Ultimate and have installed and activated it. Now I want to run a VM with Window 7. I installed the same on on the VM and now it is trying to activate and tells me i have 21 days left.
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>I thought VM OS was covered under the EULA for the original OS? ? Does MS expect me to spend $300 for an OS for every VM I crank up, run for a while and then blow away? I am on the same box with the same NIC just testing MS Beta software. I have a backup of the VHD /VMS of course from right after I got it all set up. Do I have to blow away every 29 days and restore or what? Can't they tell I"m running in VM when i go to activate???

You may need to upgrade to Software Assurance to get virtual OS rights:

http://windowsteamblog.com/blogs/springboard/archive/2009/08/06/windows-7-enterprise-edition-understanding-software-assurance-volume-licensing.aspx

If that's not what you're talking about, can you elaborate on what you're trying to do:

- What is the host? A bare-metal hypervisor, or is Win7 the host?

- If an OS like Win7 is the host, what additional software (or built-in part of Win7) are you using to manage guest VMs?

Depending on the hypervisor/host OS and virtualization model, the guest OS may not see or have any direct access to the underlying hardware, only virtualized hardware, which is not the same as the real thing via direct access. So as far as Windows Activation is concerned, you've installed that instance on "different" hardware.