I have a valid License key that I want to use in a (bought off a mate) PC that is reporting and invalid key, how do I copy over the invalid with my licensed version without starting from the beginning?

If Microsoft reports that the license key is invalid, it's likely that it's been used elsewhere on another computer. You can call Microsoft and tell them the entire situation. If you're convincing enough, they'll tell you how to activate it. Otherwise, they'll sell you a new license key and tell you how to enter that. You won't have to start from scratch -- but it'll cost you a bit of scratch.

My boyfriend uses the same cd over and over (he reformats our computers every few months or so). He just has to call them and explain that he reformatted it and they give him a new key to enter over the phone.

Simply contact Microsoft center (by phone) and thell them that you have a valid License key that you want to use in a PC that you bought off a mate and it's reporting an invalid key, and they will give you a new License key.