Windows Server 2008 CALs are not required if you are using Windows Server 2008 R2 solely as a virtualization host. The only exception to this is if you are running Windows Server 2008 R2 virtual machines, which would require Windows Server 2008 CALs. If you deploy Windows Server 2003 virtual machines onto Windows Server 2008 R2, you do not require Windows Server 2008 CALs for your virtual machine users. (You will still require CALs for your appropriate Windows Server edition, in this case, for Windows Server 2003) This is only true if the Windows Server 2008 R2 in the physical operating system environment is running the Hyper-V server rolel