What happens when you try to install and activate on more PCs than the end user license agreement (EULA) allows?
Per the EULA, installing on more PCs than the EULA allows would be in violation of the EULA. Technically, product activation does not limit the number of PCs the software can be installed on. It would be possible technically to install the software on, for example, 100 PCs. Activation would fail though on 99 (98 for Office XP or Office 2003) of those 100 PCs thereby limiting the usefulness of the illegal installation. Outside of an activation attempt, Microsoft does not know how many PCs Windows XP, Office XP family product, or Office 2003 System product have been installed on.