I'm running XP Home on my desktop and wanted to know if I can use the windows 7 that was on my laptop. The laptop got the screen cracked and I saved the hard-drive. I hooked up the hdd and it works, but will Microsoft validate and update it?
Quite so. When you buy a car, you own it and you can move the engine to any other chassis of your choice. But when you buy a computer with a OS / program, you actually only pay for the right to use it = the program. You never own the program, period.
A phone call to Microsoft, or a such one / or visit to the retailer might clear the picture. Generally, the wisest move might be to buy a full version, thus having all rights to use it. Apparently Microsoft has withdrawn sales of Windows 7, but there are copies to buy - and I mean legal ones which retailers have in store. I doubt their sale can be forbidden, as it is a matter of free trade.
Anyway, you cannot have one Windows running on more than one computer, unless you have a license for more than one.