OEM = Original Equipment Manufacturer. Retail is just that. Like a retail store like Wal-Mart. The only difference is that you can activate Retail on 3 PC's compared to the 1 time that OEM is allowed to activate.
Nothing wrong with OEM operating systems, you'll just have a little extra hassle if you ever decide to change your motherboard. I dual boot xp pro and vista home premium 64 and havent had any issues with vista. Only reason i havent fully moved over to it is that i'm too lazy to reinstall all my programs