An update is available that allows KMS to provide activation for Windows 7 and for Windows Server 2008 R2
Key Management Service (KMS) uses a KMS key to activate KMS on a KMS host, and to establish a local activation service in your environment. This service can activate Windows Vista and Windows Server 2008 on computers that are connected to the KMS host computer. This update extends support for KMS to provide activation for Windows 7 and for Windows Server 2008 R2.
Note: If a KMS key that supports Windows 7 and Windows Server 2008 R2 is used to provide activation before this update is applied, the KMS key cannot be installed after you apply this update. If you try to install this KMS key after you apply this update, you receive the following error message:
Error: 0xc004f050 The Software Licensing service reported that the product key is invalid
For more information on this issue, including potential causes, workarounds, and resolutions, see: Microsoft KB Article KB968912.