1. What's the deal with product activation?
According to Microsoft, we're all pirates. To help the company thwart further piracy, you'll have to activate your single-PC copies of Windows XP within 30 days of installation, or the OS will stop working.

To wit: you can no longer buy one copy of Windows and install it on every PC you own--not four systems, not three systems, not two systems: just one system. Of course, that's been the only legal installation rule all along, but this time, Microsoft is bound and determined to enforce its rules. Corporations, on the other hand, are not required to activate their copies because they will supposedly buy XP Professional through a site license agreement for multiple-system use; for them, activating several hundred desktops one by one would be a real pain.

Truthfully, though, Microsoft says that its primary goal is to identify blatant, large-scale piracy rather than to punish the personal user. Activation itself isn't a difficult process, and it isn't intrusive, as it requires no personal information (unlike the optional registration process).

Activation in a nutshell
In its simplest form, activation (on a Net-connected PC) is a matter of sending a unique code from your PC to a server at Microsoft. That server then returns an activation code, which allows you to keep using the operating system. The unique code belongs to your computer alone and acts as a flag to Microsoft if your copy shows up on another PC or you significantly alter some part of your PC.

Fully Licensed, a software-licensing technology firm in Germany, figured out how the process works and shared the details with the world. Activation starts with an Installation ID--a packet of encrypted data containing the 25-character XP serial number combined with hardware information--which is sent to Microsoft over the Internet. While you have the option to register your copy of XP (that is, send personal information to Microsoft separately from activation) during the activation process, Fully Licensed verified that no personal information is gathered, stored, considered, or transmitted during activation. The registration process, on the other hand, does collect personal data, such as your name, address, and e-mail address, but as a separate process that is not required for activation. If your PC isn't connected to the Internet when you install or activate XP, the OS presents the Installation ID on your screen, and you must read it over the phone to a Microsoft customer service person. (A special program, called msoobe.exe, creates the ID.)

At Microsoft's activation server, a program checks the ID to verify that the data arrived intact and that the product ID has not been used with a different hardware fingerprint (that is, another computer). XP stores the system fingerprint on your PC in a file named wpa.dbl. From now on, whenever you reinstall that copy of Windows, the Microsoft server compares the original system fingerprint and OS serial number created at first activation with the current system fingerprint for that product serial number.

If the product ID and hardware fingerprint from a new installation are not significantly different from a previous activation, the activation server generates a 44-digit Confirmation ID code and sends it back to your PC. If you are activating your PC over the phone, the customer service rep reads you the Confirmation ID, and you must type it into the activation screen. (Have a paper and pencil ready!)

What about hardware changes?
When researchers at Fully Licensed figured out Microsoft's activation process, they also determined which of 10 PC hardware items Microsoft uses to create the fingerprint portion of the Installation ID code. These components are: the volume serial number of the boot disk (created by formatting); the MAC address (a unique number embedded in the hardware) of an installed network adapter; the PCI hardware identification data from an installed CD-ROM drive, video card, IDE adapter, SCSI adapter and hard drive; the CPU model and serial numbers; the amount of RAM, and whether the system is dockable (laptop) or not (desktop).

Windows XP reevaluates this combination of hardware items whenever it starts up and discovers new devices. Microsoft now says that you can change up to six devices at a time, or your network interface card and three other devices, without having to reactivate. If you change the same component, such as your video card, over and over, it counts as only one change, and new components, such as a new modem or an extra memory module, do not count as a change. Meanwhile, if you buy a new PC with XP preinstalled, Microsoft says the computer manufacturer will probably link activation solely to the system BIOS. That means that you can change every single hardware component on your machine, and, as long as the BIOS is unchanged, you won't have to reactivate XP.

If you do have to reactivate XP, it doesn't mean you have to buy another copy, but you'll have to call Microsoft and get the company to issue you another activation ID. The threat of constant reactivation provoked such a serious public furor that Microsoft lightened up considerably on its reactivation trigger, and now indicates that it may reset your "change counter" sometime after 30, 60, or 90 or more days of using the same hardware.

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