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I know, hard to understand this post. My interpretation:

Whe had 3 machines with Office 2003 installed. We kept getting this message that they were illegal when we tried to download updates from Windows Update (think Genuine Advantage). Now that we have Office 2007, my boss thinks we are legal.

But, actually, it was the OS that was illegal because it was copied to 3 diferent machines and would not allow us to download updates.

The rest gets a bit confusing...