Sometimes, a Windows XP boxes seem to have trouble connecting to a Terminal Services (aka Remote Desktop Services) server. The user sees an error about the server being out of licenses and the server reports errors that the workstation couldn’t get a license.
At first glance, you think you need to buy more licenses, but it might turn out that you have plenty availble. The reality is that it’s probably the client machine that needs tweaking, not your server.
Pop over to your client machine, fire up REGEDIT and delete HKLM\Sofware\Microsoft\MSLicensing\Store\LICENSExxx. Take out all the license keys under the store.
The client machine will get new keys when it connects successfully the next time around.