OEM versions of Windows 7 are identical to Full License Retail versions except for the following:
- OEM versions do not offer any free Microsoft direct support from Microsoft support personnel
- OEM licenses are tied to the very first computer you install and activate it on
- OEM versions allow all hardware upgrades except for an upgrade to a different model motherboard
- OEM versions cannot be used to directly upgrade from an older Windows operating system
OEM vs. Retail
OEM Windows 7 comes preinstalled on computers. This is the cheapest way to buy windows. Large PC manufacturers like Dell, HP etc. (collectively called royalty OEMs) install windows on millions of such PCs. The main characteristics of such systems are:
The license agreement and support agreement is between you and the PC maker, not MS.
Activation by the end user is not required. Windows is preactivated at the factory by the OEM using images and standard SLP keys.
Your copy of windows is locked to that PC. The license is not transferable.
OEM system builder is what you get when you buy from say Newegg or from a local "white box" vendor. It too has the characteristics of Royalty OEM windows. Although it is possible for an individual to buy a System Builder copy, the license requires that the software be installed using the OPK (OEM preinstall kit) and then resold.
Retail version is what you buy from a retailer like Amazon or Bestbuy. Its a full price version that comes packaged in a retail box with a retail product key. It has to be activated online via MS servers using the key on the box, it is not tied to the PC it was first installed on, though it can only be used on a single computer at a time. And, MS directly provides the support for it. It is also more expensive than OEM copies.
As far as functionality is concerned, theres no difference between any of the versions above, given any specific edition (i.e. between OEM pro and retail pro, or between OEM ultimate and retail ultimate).