Both, actually. The license for a plain copy of Windows specifically says that you can only install it on one computer unless you have what's called Volume Licensing, and that's for businesses with many computers. You pay a certain fee per computer.
If you try to install a plain single copy of Windows on more than one computer, Microsoft's database already has the product code you used as being installed already on one computer. When you try to install it on a second PC, the database will say you can't do it because the Product Code is already in use.
I forget exactly if this happens when installing or trying to activate it within 30 days.