Vista - Datacenter Edition - How to activate OS in VM - Free Licences?

I am shopping for a dedicated server and most ISPs have great prices on
Datacenter Ed. of Windows 2008.

But what is not clear is once I have root access to the server and install a
Server OS in a VM how do I use my right to a free licenses of Datacenter
Edition?

I called Microsoft Presalses and was told the Datacenter Ed itself will
activate the VM OS. I can't test that becuase I don't have a licenced
Datacenter Ed yet.

Can someone who has actually done this comment of if this is true and
problems one can run into please?

Also does it matter what media disks I use for VM OS installations? For
exmaple Open Volume License media disks or Retail disks that have already
been installed and activated, downloaded trial versions?

Thanks for your time.

Sorry I just reread my post and it isn't clear what I asking. Let me try
again.

In the Windows 2008 Datacenter how does one take advantage of the free
licences for the OS in the VMs?
What are the steps to activate/register a OS in a VM in Datacenter Edition?

Cheers,
Brent

"Brent Welke" <brent@xxxxxx> wrote in message
news:eZwWRibOJHA.1488@xxxxxx

I still don't know how free activation works. But my experince of
consolidating two win2k3 std servers to Datacenter is that one win2k3
required reactivation. I tried the "over the internet" option and it didn't
work. I then used the phone option and talked to a phone robot and activated
the license. The win2k3 that needed reactivation was a Open License version
and shouldn't have needed activation in the first place.

I still don't see free activation for guest VMs in Datacenter.