Downgrade rights from Windows 7 to XP

I recently came across with the following statement when I was going to install Windows 7 on my computer which was running Windows XP initially:

"For a limited time of 18 months after the general availability of Windows 7 or the release of a Windows 7 Service Pack, whichever is earlier, the OEM license of Windows 7 Professional and Windows 7 Ultimate will include downgrade rights to Windows XP Professional. After that period the OEM license will enable downgrade rights to Windows Vista Business."

So does this mean that we will not be able to downgrade it once the date has been passed out or is it that it is illegal to use a computer downgraded after the specified date?

According to the downgrade rights, only certain OEM versions of Windows 7 include downgrade rights:

- Windows 7 Professional and Windows 7 Ultimate include downgrade rights to Windows Vista Business and Windows Vista Ultimate.
- Windows 7 Professional and Windows 7 Ultimate include downgrade rights to Windows XP Professional, Windows XP Tablet PC Edition, or Windows XP x64 Edition.
- Other OEM Windows 7 versions (for instance, Windows 7 Home Basic and Windows 7 Home Premium) do not include downgrade rights.

The statement states that an OEM manufacturer is delivering machines with Windows 7 licenses which have a downgrade right to XP, in a given timeframe. But since the Windows XP support is stopped by Microsoft, the time to get the downgrade to XP will expire. And so you will be having only the option to downgrade to Vista.

In that case how the user is benefited with this kind of downgrade rights? Moreover, do I need to activate the downgraded computer or can I use the same activation key?

With downgrade rights users are allowed to use the same computer and continue to use Windows Vista or Windows XP Professional until they are ready to upgrade. If you already have the license then there is no necessity to get a new one for it.