Here are the facts pertaining to activation:
Piracy Basics - Microsoft Product Activation
http://www.microsoft.com/piracy/basics/activation/
Windows Product Activation (WPA)
http://www.aumha.org/a/wpa.htm
There is some misleading information in the AUMHA Nichols faq -- please
note my comment below.
Under most circumstances, telephone activation is necessary for a
retail or generic OEM copy only if it's already been recently (withing
the past 120 days) activated, and for an OEM copy from a major OEM
(Dell, Gateway, HP/Compaq, etc) that isn't BIOS-locked.
Just to clarify: re-installing, including a repair installation, using
the product installation key on the Certificate of Authenticity (COA)
pasted on the side of your computer by the OEM (original equipment
manufacturer, e.g. Dell or HP), will >always< result in your having to
call a Microsoft representative, as part of the activation process.
Using the Windows XP operating system media provided by the OEM for a
repair installation may not require the use of the installation key from
the COA, but if you have to use an installation key, you will have to
call Microsoft. Internet activation will not work, ever.
Rampant stealing of COA installation keys resulted in a change of
policy, which, essentially, turned off internet activation of OEM COA
installation keys. When the change of policy was initiated in March
2005, only the top 20 OEMs were affected, but since then most all OEM
COAs have been brought under the policy. The installation key on the
COA is still valid for the computer on which it is legitimately pasted,
but you have to call to complete activation.
The AUMHA faq by the late, great Alex Nichols, cited above, seems to say
that the COA product installation key is no longer valid, or will not be
honored, and that the owner of a computer, has to get repair or
replacements from the original manufacturer. This is not true.
The major OEMs do not use the COA product installation key for the
original factory installation, which is accomplished using an
installation key with the activation properties of a volume license key.
Unless the owner has to do a reinstallation, the COA product key is
never used at all. The COA product installation key is not
"bios-locked", but if the owner/user has to use it for a repair
installation or a re-installation, he or she will have to call a
Microsoft representative as part of the activation process to answer
some questions.
Generally, the Microsoft representative will ask for the product
installation key, for the make and model of the computer, and for name
of the merchant where the computer (or OEM copy of Windows XP) was
acquired, as well as, whether this is the first time the installation
key has been used, and whether this is the only computer on which it has
been used.