Alright, let's take a look at the XP (Home) EULA:
1.1 Installation and use. You may install, use, access, display and run one copy of the Software on a single computer, such as a workstation, terminal or other device ("Workstation Computer"). The Software may not be used by more than one processor at any one time on any single Workstation Computer.
.
.
.
1.5 Storage/Network Use. You may also store or install a copy of the Software on a storage device, such as a network server, used only to install or run the Software on your other Workstation Computers over an internal network; however, you must acquire and dedicate an additional license for each separate Workstation Computer on or from which the Software is installed, used, accessed, displayed or run. Except as otherwise permitted by the NetMeeting and Remote Assistance features described above, a license for the Software may not be shared or used concurrently on different Workstation Computers.
Seems to me that cloning a hard disk is not only legal, but you can also do the same with the XP disc. The only restriction is that you can't be running the software on more than one machine (but you don't need to clone XP to do that).
"Technological progress is like an axe in the hands of a pathological criminal."
All my posts may be freely redistributed under the terms of the MIT license.