A. The basic idea behind Windows NT licensing is that you purchase NT Server and license which allows you to install the software on one machine, however you cannot use the software unless you have a client license. A client license is just a piece of paper, no codes, no passwords, just a piece of paper saying you can use one more client. A client license is around US$40, which means you have to buy the NT server software (around US$650) and then US$40 times the number of clients to the machine, plus the cost of the client software and licenses!
There are two methods of licensing, per seat and per server. Per seat licensing is where each network user has a license, and allows the user to access as many/all of the servers in the enterprise. This is the most popular and cost effective method if you have two or more NT servers.
The second method, per server, also known as concurrent licensing is where licenses are purchased and "installed" on the server. For example, if you purchased 50 client licenses and installed them on the server, up-to 50 connections at a time would be allowed. If you then purchased another server, you would need to buy another 50 client licenses for connections to that server.
From the above you can see that if you have more than 2 NT Servers you will want per seat, with the exception of a machine such as an Internet service server, which would have different people connecting to the site all the time, so you would need x client licenses, where x is the maximum number of people you expect to connect at any one time.
It is possible to perform a once only conversion of per server licenses to per seat licenses.