This has nothing to do with licenses imho: since you run a separate Windows on that CPU you need a unique license for it. From where this thing boots is entirely irrelevant. You have to have more than one boot image, one for each diskless client due to CD key issues, but harddisk space is cheap in aggregate on the server: the trouble is that you always need to buy a 40-80GB disk per client, when a 2GB one would suffice for the OS.
What I found so far is people making a big ramdisk on the (diskless) client and run Windows off that "disk". However that only works with cut down versions of Win98, since beyond that, the OS is way to big to fit into a reasonable RAMdisk. No use saving a few $ on a harddisk to avoid hdd breakages and spend it on 1 GB or 2GB of RAM instead. Just not worth it.