OEM software means that you don't get free support from Microsoft, but the supplier of the OEM disk. For instance, if you buy a PC from Dell with a Dell-supplied OEM version of Windows, that means you contact Dell for support, NOT Microsoft! It also means there's no manual or pretty box to put on a store shelf.
Buying an OEM version of an OS is usually possible when you buy a motherboard, or a hard drive; both are considered to be enough to satisfy the requirement of a "new computer" to Microsoft lawyers. It is possible to buy OEM versions of Windows without the additional hardware purchase, but this is a grey area of legality.
From Royal Technologies website:
"Original Equipment Manufacturer: OEM software is a full version which includes the CD-ROM, the Certificate of Authenticity (COA), and the product key codes. These elements are all you will need to load and run the software. The software runs exactly the same way as the full retail version (including automatic updates). The differences between OEM Vs RetailBox are:
A. OEM does not come in a box.
B. Full version OEM will only install as a full version, not as an upgrade. Only software titles listed "Upgrade OEM" can be used to upgrade from a previous version.
C. All OEM software behaves just like full version retail box software when upgrading: OEM software can be upgraded to later versions.
D. Manufacturers do not supply free technical support or installation support for OEM."
Tom