Microsoft aims to stay ahead of pirates

This counterfeit copy of Office 2003 is billed as an OEM (computer maker) copy of the software with a product key. In actuality, the code is a volume license key for Windows XP. A doctored installation program appears to ask the user to "validate" with the license key, but in fact no information is actually being sent to Microsoft.
Antipiracy measures were a bit of an afterthought when it came to Windows XP. But with Vista, most of Microsoft's antipiracy work is built into the software itself. Technology included in Vista allows Microsoft to periodically evaluate the operating system to make sure it is legitimate, rather than just having one opportunity, when the product key is first entered at activation.
Credit: Microsoft