A Windows XP license can only be used on one (1) computer. A second installation on a different computer requires requires a second license.
From the Windows XP EULA:
1.1 Installation and use. You may install, use, access, display and run one copy of the Software on a single computer, such as a workstation, terminal or other device ("Workstation Computer").
Please read your End-User License Agreement by going to Start > Run and type: WINVER , and hit enter. Then click on "End-User License Agreement".
If you already have a retail copy of Windows XP, you can obtain additional licenses for another computer or laptop by visiting the following Microsoft Web site: http://shop.microsoft.com/special/wal/walinfo.asp