I just had the hard drive go out in my Averatec laptop a couple months ago and I just went to Office Depot and bought a 250gb HDD (replacing an 80gb HDD) and I used the original backup disks that I made when I got the machine. Everything installed and it looked just like it did the day I first bought it.

I also paid $1200 for it when it was new. Maybe that's why HP's are so cheap.You only get one shot; and when anything major fails you have to not only have to buy the part but you also need a new operating system and all the other software they gave you for "free".

That's an interesting story. I wonder how HP are tying the restore discs to a particular hard drive. Given that the response indicated a hard drive purchased from HP would have allowed the recovery discs to be used, and assuming the user would have the option to replace the original drive with a newer/larger model, I'd be curious as to how it works.

Although the computer would have had a COA sticker attached and the owner most likely could have borrowed or downloaded a generic OEM installation CD, installed Windows using it and the COA key and then called Microsoft to activate it. And although that'd probably involve them also having to manually re-install drivers, it'd at least give them a clean install which wouldn't include all the unnecessary crud which is often included with restore images.

The COA key is an OEM installation key. It will work with a standard OEM Vista installation disc (as opposed to a standard retail one). You can download an image of an OEM disc in order to burn it yourself. I assume you can do so legally as there's a few legit sites which offer Windows disc images for download.
Then you use your OEM disc to install Windows using the key on the COA sticker. It won't activate online as Microsoft have blocked them from automatic activation, but a phone call to Microsoft should see it activated without any problem.

What makes you say HP aren't releasing any OEM discs for Vista?

Personally I think Microsoft would be on pretty shaky legal ground as far as the "licensed not sold", "OEM can't be transferred to another PC", thing goes. But that aside, everything I've read seems to indicate that they're quite reasonable when it comes to activating a legit version of Windows, even if the EULA or the rules weren't followed exactly. In a previous discussion here, one poster indicated he uses the COA key quite regularly when fixing OEM keys and has never had a problem with activation. At one stage, while providing links for rogespeed to completely ignore while he continued to offer advice in regard to the necessity of having a "fully supported license", computer repairers who have special OEM COA key activation privileges, and the existence of Windows "regions", I even found a Microsoft page which explains how to obtain a replacement COA key from them should the original one become lost.

Normally an OEM version of Windows which is installed via a restore image is tied to a particular BIOS and doesn't need to be activated. Link
That's a system Microsoft has had in place with the larger OEM's for quite a while. Locking the restore discs to a particular hard drive isn't a Microsoft requirement I've ever heard of. It's something HP have added to their restore media which seems to achieve nothing but force you to buy a new hard drive from them. I wonder if that's even legal? I guess when it's riding on the back of Microsoft's potentially illegal end user restrictions in the form of OEM "licensing" it probably doesn't look so bad.

"they would do it right now if they thought anyone was
dumb enough to pay for it..."

There's a large number of people who seem to think EULA's are 'law" and everything written in them must be obeyed without question. Maybe you wouldn't even have to seal the unit... just stick something in the EULA which says you're not allowed to open the PC for any reason.... the world's full of dumb people.