What OS is the Client computer running?  If it has win2k or XP Pro, those comes with CAL's so the terminal server should not have to re-issue temopary licenses for your new machine.    
If the old machine is running Win9x you can remove the license by removing this entire key:  

HKEY_LOCAL_MACHINE\SOFTWARE\MICROSOFT\MSLICENSING

ok, maybe im using the wrong word then.  We had to purchase 2 - 5 pack licenses to install on the terminal server.  

The machine is running 2K and the laptop is running XP.

Open up the Servers Licencing Manager (under admin tools) and under the "per client" tab there will be a list of the allocated licences.

Delete the one you don't want.

jonty:

I've opened the Terminal Services Licensing Window and do not see the 'per client' tab you have mentioned.  I have 3 menus at the top (Action, View and Help), and then in the main window, the name of my terminal server.  Listed under the terminal server name is the following:

* Existing Windows 2000 License
* Temporary Licenses for Windows 2000 Terminal Services
* Windows 2000 Terminal Services Client Access License

so, let me know your thoughts .

Thanks

escheider

We might be talking at cross-purposes here, so I'll elaborate :)

Windows 2000 Server doesn't come with any Terminal Services Client Access Licences as such.  These are specific licences that are seperate to the CALs you purchased for the Windows 2000 Server itself.  

(To run Terminal Services you require a w2k Server Licence, a win2k CAL and a TS CAL.  The only exception to this is that the Administrator account doesn't need a CAL to access the server).

If you are running Windows 2000 or XP Professional (not XP home) on a client that is connecting to your server, you don't need a licence for that specific device.

If you do need to purchase Terminal Services CALs then you need to install them via the Terminal Services Licencing util that you have already found.

NOTE:  The Licence Manager I was referring to in my previous post was the actual SERVER Licence Manager, which is no doubt holding a CAL for the desktop as well as the laptop.

Hope this helps clear up any confusion.  Cheers.  Jonty

thanks for the input and yes a Microsoft Rep was needed.  Sorry for the delay on this .. i thought i had already closed it.