I have some questions about Windows 2000 Terminal Services licensing on application mode. Microsoft always said that TS licenses were free for Windows 2000 Pro clients. But I am not sure this is the case anymore. Can you please explain how the licensing works?
Although Win2k Pro clients don't need a separately purchased Terminal Server Client Access License (TSCAL), it is not truly correct to say that they have a built-in license. What they have is the ability to draw their licenses from the Unlimited pool on the license server, so you can effectively have as many Win2k Pro clients using a Win2k terminal server as you want. However, those Win2k Pro clients do not start life with a TSCAL. If a computer with no TSCAL connects to a terminal server, then the server attempts to find a license server to issue a license. If it finds one, all is well. If it doesn't, it issues a temporary license. Since Win2k Pro clients do not have built-in TSCALs, in the absence of a license server they'll get temporary licenses that will expire in 90 days.
The bottom line is that you need a license server to back a Win2k Terminal Server and you need to activate this...
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license server, even if all your clients are running Win2k Pro.