There is a nice downloadable and publicly available one page .PDF document available from Microsoft here:
(below copied from OEM Partner site)
When and Why Would Customers Use Downgrade Rights?
Your customer is purchasing a new computer system and it needs to run the same operating system as their existing 10 systems—Windows XP Professional. You can preinstall Windows Vista Business on the new computer system, then offer your customer the added service of installing Windows XP Professional on your customers’ behalf. The downgrade media must be supplied to you from the end user and must come from a legally licensed version of Microsoft retail, OEM/System Builder, or Volume License channels.
If the end customer decides to downgrade, they can use one legal version of the downgrade media for multiple installations. The end customer does not need to have one set of Windows XP Professional media for each PC they are downgrading because they have acquired legitimate full operating system licenses for Windows Vista Business , which gave them the right to downgrade. Your customer can run Windows XP Professional until they are ready to upgrade the system to Windows Vista Business—and at that time they would already be licensed for the Windows Vista Business they purchased with this new machine.
When an end user is using their downgrade rights offered under the License Terms in Windows Vista Business and Ultimate versions and they use both Windows XP media and a product key that was previously activated, they will fail activation due to the hardware configuration change when installing on the Vista system. In these cases the end user will be prompted to call the Activation Support Line and explain their circumstances to the Customer Service Representative. Once it is determined that the end user has a valid Vista Business or Ultimate license, the Customer Service Representative will help them activate their software.
Get more information about downgrade rights and answers to frequently asked questions.