Hyper-V and Server 2008 Licensing?

I have a co-worker who is under the impression that if you run Server 2008 with Microsoft's virtualization product you have have unlimited virtual servers running on the same license. This doesn't sound right to me. Can anyone shed some light on Microsofts licensing rules for 2008 virtual servers? I'm looking for a definitive link but haven't found it yet. Thanks.

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