Yes, and Yes.
Here's chapter and verse from the XP EULA and "Frequently asked questions about Microsoft Product Activation".
1.2 Mandatory Activation. The license rights granted under this EULA are limited to the first thirty (30) days after you first install the Software unless you supply information required to activate your licensed copy in the manner described during the setup sequence of the Software. You can activate the Software through the use of the Internet or telephone; toll charges may apply. You may also need to reactivate the Software if you modify your computer hardware or alter the Software. There are technological measures in this Software that are designed to prevent unlicensed use of the Software. Microsoft will use those measures to confirm you have a legally licensed copy of the Software.
13. SOFTWARE TRANSFER. Internal. You may move the Software to a different Workstation Computer. After the transfer, you must completely remove the Software from the former Workstation Computer.
Can I transfer a license to another computer?
Consumers may use the terms of their license agreements to determine if transferring a license to another computer is allowed. If a transfer is permitted by the license agreement, the product has to be removed from the computer where it was first installed. Users may have to complete the activation on the new computer by phoning the Microsoft Activation Center.
SD