How many Vista machines do you have on your network, you need more than 25. Don't use KMS licensing unless you do. Use MAK licenses instead.
If you are just testing to see if the clients will get the licenses to test Vista deployments, you'll need 25 Vista OSs to make it work. Once you reach that threshold only then will it start handing out keys to clients. If you are deploying Server 2008 OSs, you only need 5 servers for before KMS will start handing out keys.
Our desktop deployment guys needed to test their builds and part of that process was ensuring licensing was applied. Their workaround was to re-build about 5 desktops over and over and allowing it to attempt to register until it got to the 25 host threshold. Since we had two KMS servers, we actually needed to do it 50 times. as each server keeps an independant database. Apparently virtual Vista OSs will not activate a KMS server. I never tried it, but that what our desktop guys told us.
You can check your threshold by issuing this command on the KMS server:
slmgr.vbs -dlv
You can also see some good information from Volume Activation Management Tool:
http://www.microsoft.com/downloads/details.aspx?familyid=12044dd8-1b2c-4da4-a530-80f26f0f9a99&displaylang=en