Volume Activation provides two different models for completing volume activations. The first model is Key Management Service (KMS) and the second is Multiple Activation Key (MAK). KMS allows organizations to activate systems within their own network, while MAK activates systems on a one-time basis, using Microsoft’s hosted activation services. Customers can use either or both activation methods in their environment. The type of key entered in the product determines the activation method.
If you plan to deploy Windows 7 and/or Office 2010 using Key Management Service (KMS) as the activation method, please note:
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Windows Server 2008 is not supported as a KMS host to activate Windows 7 and Office 2010.
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If you are using Windows Server 2008 as a KMS host, here are your alternatives:
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Upgrade the KMS host machine to Windows Server 2008 R2.
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Downgrade the machine to Windows Server 2003.
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Run the KMS host on a Windows 7 volume edition machine.
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Run a Windows Server 2003 virtual machine on the Windows Server 2008 machine.
If your organization has fewer than 50 PCs, the best option is to use Multiple Activation Keys (MAK) with Volume Activation Management Tool (VAMT).
While Microsoft makes every effort to cover all of its previous platforms for compatibility, new technologies may make it necessary to decide which previous versions will continue to be supported. Therefore, Windows Server 2008 is not covered as a platform as an Office 2010 KMS host.
Volume License Keys (VLK), including MAK and KMS, are issued to you under a specific license agreement and enable your organization to use the software that you have licensed.
VLKs can be used only with Volume Licensing products; they cannot be used with retail software or software that is preinstalled on a new computer (original equipment manufacturer, or OEM, products).
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KMS and MAK 
