Hi,

Thanks for the clarification and advice. Here is a Microsoft article about SQL Licensing:

http://www.google.co.uk/url?sa=t&source=web&cd=1&sqi=2&ved=0CB4QFjAA&url=http%3A%2F%2Fdownload.microsoft.com%2Fdownload%2F9%2FE%2F4%2F9E4CCEC9-222B-4563-8DCD-43F941ABA73F%2FA_Guide_to_Assessing_SQL_Licensing.docx&ei=mC4lTvuLMsS1hAf4vv2XCg&usg=AFQjCNHrqNOn8AJgdJGAgsrkWDuz4zgX0A

It's very clear about licensing virtual machines. Because the host in my case has two physical processors...