In fact, in the end I did get my license server working. Basically it allows us to install a single application that manages all licenses. When a customer buys a product we give him a license server that he uses on his site to manage all his applications. A license administation client uploads licenses to the server which stores them in a secure way. The license server also talks to my local license activation server every once in a while so I can have an idea of how many purchased licenses are actually being deployed. Licenced applications don't have to worry about installing licenses. They simply ask my server for a license by user name and machine id. If they own a license, they are authorized, otherwise they will aquire a license if one is available. If none are available, the application stops.
In the comming weeks we will be running a beta test with a new product. The product uses a project server hosted on our site that licenses our remote beta testers by accessing a local license server (the product is a desktop application). The beta tester don't even know that they are using a licensed product.
Overall, the licensing system works pretty well. I don't think I understand everything about Xheo and sometime trying to resolve problems is like playing baseball in the dark (a swing and a miss) but Xheo does provide a lot of features and it can be coerced into working.
Funning thing is, a year after I implemented and tested this, I was forced to reactivate a licence service. Unfortunatly someone had changed the network setting of my server (we have an internet facing project server accessing a license server behind the firewall. It took us almost a week to unravel the network mess before finally figuring out what was wrong. The only thing we knew was the we didn't have a valid license...