[See update at the end of this post.]
This is rich: Paul Thurrott just had one of his test systems rejected by WGA. Note to Microsoft: Accusing one of your most enthusiastic and supportive journalistic contacts of being a pirate and demanding that he fork over $149 for a new license is a really, really stupid media relations strategy.
According to one of the screens that Paul published, the key used to activate his copy of Windows "is counterfeit and was most likely generated by a non-sanctioned Microsoft key generator." Now, Paul and I travel in many of the same circles and are members of many of the same Microsoft programs. His copy probably came from an MSDN distribution. I have a shelf full of legitimate software from other, similar sources, including Microsoft's Action Pack subscription and its System Builder program. Not to mention the boxes of software that we get directly from Microsoft for review and evaluation purposes. People like Paul and me simply don't need or use illegal key generators.
Stories like this one make a mockery of Microsoft's claim that the WGA code has produced only a "handful" of false positives. Ha!
I'm on the road for a few more days but should have several certifiably non-genuine copies of Windows XP waiting for me when I get back in the office. I'll have more details next week.
Update 1-August: Paul T. has updated his post and now says that his copy was probably pirated after all:
I did actually buy a copy of Windows XP Media Center Edition 2005 in late 2005 from an online retailer to see what the experience would be like... And sure enough, the software I got came in a simple little case with no documentation or other identification. The thing is, I can't imagine I would have installed that software in a virtual machine. It seems like such a waste, since the Product Key for that version could only be activated once, while the versions I get from MSDN can be activated multiple times. But I'm honestly not sure.