ok, im still searching for the origional article i read some months back, however i have found another post with a link to MS documentation that seems to support what i was saying. as usual the MS documentation is a open to interpretation.
--MS link in post
Q. What exactly is a processor license and how does it work?
A processor license gives you the right to install any number of copies of SQL Server 2005 on a single computer, as long as you have purchased processor licenses for all of the processors on that computer. If you have made a processor inaccessible to all operating system copies on which the SQL Server software is set up to run, you do not need a software license for that processor. In a virtualized environment, processor licenses are required for every processor that is accessed by a virtual machine. Please see the virtualization licensing brief and virtualization white paper for further detail. Find out more about how Microsoft Adapts Windows Server System Licensing to Virtualization Scenarios.
In addition to the installation rights to the actual server software, processor licenses also grant any number of devices or users the right to access and use the server software running on those processors. These access rights are available to all devices or users, regardless of whether they are inside the organization (intranet scenarios) or outside the organization (intranet or extranet scenarios). The processor license contains all that you need. With a processor license, there is no need to purchase separate server licenses, CALs, or Internet connector licenses.
Q. Do I have to acquire licenses for all of the processors in a server?
You have to acquire licenses only for processors that are accessible to any copy of the operating system upon which SQL Server 2005 is installed. In a virtualized environment, processor licenses are required for every processor that is accessed by a virtual machine. Please see the virtualization licensing brief and virtualization white paper for more information on how to license under a virtualized environment.
So to me that seems to say that as long as the processor is available to the OS (not sql) it must be licensed.
Correct/Incorrect? Discuss :-):-P