If I upgrade my windows xp to win 7 with the upgrade version, will my xp be free to put on another computer? Or will it use up both licenses

I usually could help with most issues with computers but for this you'd probably find a faster more reliable answer typing this in the search bar.

Usually no. You would have to have what they call a volume license to use it on multiple computers

No. It's an "upgrade", so your license will be still "used". If you have less than 2 gb of ram, I suggest you don't do it