I can give you my experiance. I own a 3 year old Dell 410 desk top PC. It needed an upgrade to keep up with newer software. Step 1 More memory Max for this model. 2 New hard drive, went with the new Solid Sate Digital Drive 60 Gigabyte. To make this happen needed to purchace Windows 7 Home Premium SP1 32bit (OEM) System Builder DVD 1 Pack. OS does have support for SSD drives, with other experienced tweaks these were the results. Windows XP to 7 with the upgrades mentioned. The entire prosses took me about 3 hours. 2 hours to install 7 and all my other software. Has run flawless out of the box. computer start up went from 5 to 7 minutes to 92 secounds. from user screen log on it was 3.5 minutes now 23 seconds. All made possible by the product you want to purchase. I hope this helps.
No you cannot. You must have one unique (paid for) Product Key for each machine you want to install Windows 7 on. The System Builder DVD gives you one product key good for one machine only. You can buy additional licenses, however. I don't know the details of how to use or take advantage of Microsoft's "Volume Licensing". I don't install Microsoft Operating Systems in large enough volume to justify the cost of a volume license. However the idea is you get one product key per machine -- something like that. What you can be sure of is that if you install a Microsoft Operating System from a DVD, be prepared to type in a unique, paid-for product key for each machine you install on. You can browse http://www.microsoft.com/oem to get more information about their System Builder program, including the licensing.
Microsoft's Office with "Word" has never been included with Windows 7 Home Premium. It is purchased individually as a separate product. Back 2 or 3 years ago MS office was included in most new laptop and PC purchases but this has also stopped being true. What most new laptops and PC's offer is Microsoft Office starter. This is a reduced functionality Word® and Excel® with advertising. Pretty much useless. There is "Open Office" which is free, fully functional and compatible to Microsoft office. Just Google around for it, you'll find it. There is also Google business apps which is finally beginning to cut into Microsoft's market share, however... it is cheap, but not free. Good Luck!
I have installed Windows on hard drives that were brand new and just had the original factory formatting. Once started in the CDROM drive Windows would check the new drive for formatting, format if necessary, and then proceed to install itself on the new drive.