What is the difference between an OEM copy and an Upgrade copy?
1]An Upgrade copy will upgrade an existing operating system,say for example,from Windows 98 or Windows Millennium to 2k or to XP.Where as an OEM copy can't be upgraded.
2]The EULA is also bit different between the two.
3]An OEM operating system license (such as the license for Windows) cannot be transferred from its original PC to another PC.However, the FPP (Full-Packaged Product)version of Windows may be transferred to another PC as long as the EULA, manual and media (such as the backup CD) accompany the transfer to the other PC. Also, when a customer purchases an OEM product, the OEM license requires the OEM to provide support for the product.
For More information:-
XP OEM Clarification