including a nice shiny new copy of windows XP to install. I figured that's my copy to use as I see fit. I paid for it. It's only used on one PC.
If ... that copy is FPP (Fully Packaged Product) ... i.e. it came in a shrinkwrapped cardboard box, and the CD-ROM is not gold (I think XP FPP CDs had a solid blue label/print on the front)..... then yes, you are correct, it is yours to do with as you see fit as long as you only use it on one machine at any one time.
On the other hand if they bundled a gold OEM disk ....(which they shouldn't have without pre-installing for you).... then it's a different story.
Confusing I know..... but hey, it's Microsoft !