I've always thought (with absolutely no evidence to back it up) that it's on the install CD - the install program just checks that the number on the box matches what's on the CD and if so the install goes ahead and does not store that number on your Mac. If it did store it on the Mac, what would it check it against?
One enters the Product Key onto the system as part of the install process, I assume that the format of the key is checked whenever the the program is started to ensure that it is a valid key - perhaps even calling home to check that only one occurance of the key is in existence - perhaps it is logged in Redmond along with the computer serial number.
What I would like to know is where on my computer the product key information has been stored and can I see the information.
When you validate the product (within 30 days or so) you again have to enter the product key. Presumably Redmond or some more local office then records the key against a check that the system is a genuine Windows product. I would doubt that the program checks the install key every time it starts. Once validated it should not need to do so.
Perhaps one of our more Windows experienced members could pick up here.
I don't think the validation key does anymore than confirm that you have the actual key. In the past five years, I have loaded Office 2004 on five machines in two locations using the same key which was on the packaging.
Not sure that this will take it further, but here goes...
Adobe (Creative Suite, Photoshop etc) explicitly says that their validation software stores the critical info, encrypted, in a 'special part of the drive'. Users are warned to de-validate the software (online) before doing a system update and other heavy lifting, and then to re-validate it. This works fine, and a cloned copy will run -- from the clone as startup -- on the Mac from which it has been cloned without de- / re- validation. Cloned copies cloned back to the original partition/drive are fine. The validation is linked to a particular Mac.
MS Office is far less draconian: I have copied (and cloned) MS Office X and 2008 between partitions and Macs here easily and without any fuss. This suggests that the validation is held within each Office programme somewhere.
Control-clicking the programme icon > show package contents > Contents > pkginfo is the only (visible) file here that has an old date suggesting that it has been unaltered. I haven't looked for invisible files...
Thanks everybody useful information here. Especially from John S. Need for information has passed as a result of a successful update from 10.3.x to 10.5.x very old Powerbook that had MS Office installed on it. No user data or applications were harmed in the upgrade.