So you got or are thinking of getting a used OEM COA or CD on Ebay, is it safe?
Will Not apply to Vista. (Vista has limited activation, and other activation issues.)
 
In general yes, doubtless there are some people selling bad, blacklisted, or copies, but as a rule most removed from Service COA's and CD's are fine. You need to be aware of what your looking for, you cant mix and match license types, or versions. Its not overly bright to buy a COA with the License Key showing in the ad, these should be blanked out.

Will it work?

     In most cases yes. If an OEM Key from a valid COA is used with same type of OEM software IE: OEM XP home COA and OEM Home CD its likely that Windows will activate with little trouble. A mismatch IE: OEM XP Home and a Retail XP Home, XP Pro, Vista, CD will result in a call to validate the install, and a refusal to do so. Likely you will be advised to call the OEM for help, and they will offer to sell you a Retail CD/DVD.

Note: Should you be refused for whatever reason its best to remain calm and call back later. Take some time to be sure you have an OEM COA and Software.

Note 2: I have been told and done this myself while upgrading a PC, that you may be asked if the system was upgraded, IE Hard Drive, Mother Board, saying yes seems to work.

Is it Legal?

Sure you can sell them. Using an activated COA or CD on a system it was not supplied with is in violation of the EULA or Licensing agreement. and as such a Pirate Copy. It should pass the Windows Advantage Test, after all its real, just no longer valid as the terms of the License tie it to the system it was first activated on.

What are you talking about? I bought it, I can use it however I see fit.

     Clearly you didn't read the terms outlined in the EULA when you agreed to it, few do. You bought a license to use a single copy on the system it came with as defined by the agreement. You own the computer, Microsoft owns the OS, or product, and yes they can tell you how you will use it. Lets see if we can clear this up.

What is an OEM?

    An Original Equipment Manufacturer or OEM is a person or company who builds and sells computers. An OEM license is a license to use software distributed and supported by an OEM.

How can a OEM License be used.

An OEM license For example the license for Windows XP Home, Pro, Vista, Server 2003, Office, etc. cannot be transferred from its original PC to another PC. The computer system can be updated with new components without the requirement of a new software license. The exception to this is the motherboard If the motherboard is replaced, the computer system is deemed New and a new license would be required.

    The operating system licenses must remain with the device that retains the motherboard, chip sets, and chassis that include the serial number of the device.

Downgrade rights on an OEM license. Lets say from Vista to XP.

OEM Operating system licenses Except for Windows XP Professional do not include downgrade rights. Windows XP Professional is the only MICROSOFT OEM software product which grants such a downgrade right.

OEM Server and Desktop.

In general, OEM server and OEM desktop operating systems have similar EULAs. They are generally non-transferable and there are normally no downgrade rights.