In Windows 7, and Vista, we have two opportunities to activate our software using volume licensing. Multiple Activation Key (MAK) and Key Management System (KMS). MAK is useful in environments of less the 25 clients, or when you do not want the clients to have a need to check in with the activation server. KMS is useful when you are activating more than 25 clients. These clients check back with the activation server every 7 days, but can go as long as 180 days before deactivating.
Since the clients need to have some contact with a KMS host, the question is how to make this redundant. You can use the same KMS activation code to bring 2 KMS hosts online. One primary, and a backup. Microsoft does not recommend more than this.
Reference: http://www.eggheadcafe.com/software/aspnet/32994952/activationkms-issues-ca.aspx (See the comments from George Yin).