The trick to dealing with Microsoft's call center is to always tell the automated system that you have only installed it on one machine (it doesn't matter if this is not true, all that really matters is that you said, "one"). The answer is always "one", and you should have no problems. I rebuild machines and have to constantly re-authorize windows. I also have a tendency to experiment with my machines and have mucked things up beyond repair on several occassions to where I've had to re-install windows, and after I've added or replaced a good number of hardware and peripherals, windows will assume I'm using a different machine. So when I call, I simply say "one". I do this for Office as well. There is no reason why I should have to re-purchase the software when I'm the only one using it and have decided to move onto a new or different machine (again, I tell them "one" when I have to make the call).
If the copy of windows you have is a genuine and full copy, go ahead and give it a try. Just remember to create restore discs of Asus' setup before you attempt to mess around with anything, and don't forget to verify that they're working. That way, if anything goes wrong, you can just restore your system to the manufacturers setup.
Basically, my biggest pet peeve with win7 Starter is that I couldn't change the desktop background. Another annoyance is that you can't run more than 3 programs at a time. Starter is severly crippled. It makes sense for a netbook though, but in my opinion, disabling a feature as simple as changing the background picture is a bit excessive, particularly when I can do something this simple on my cell phone and my iTouch. Not to mention that the windows logo is just plain unattractive to look at; a plain background would have been more preferrable. It just really bugged me. There is a free program you can get that was designed specifically for Starter to create a type of "virtual" desktop that allows you to change the picture, but I found that it slowed my startup a bit, and I'm a little fussy in that area. If you're interested, the program is called Oceanis. You can find it easily by googling it.