Engadget nails it when they say:

Depending on who you talk to, Windows Product Activation is a serious privacy violation, a headache, minimal protection against piracy, or all of the above. Lucky for us, Microsoft is finally seeing (some of) the folly of its overbearing ways, and has gone with a more permissive nagware method with Vista SP1. This as opposed to the regular method of routinely locking users out of their systems, which, wouldn’t you know it, tended to hurt legitimate users more than pirates.

This is the understatement of the century.  Almost any emmigration from the Office/Windows empire can be attributed directly to Microsoft’s pigheadedness, and WPA is the most visible expression of it.  Software activation is something that came out of the realm of shareware, and Bill Gates attitude about shareware and freeware (especially in the nineties) is well-document and decidedly sour.

Yet product activation takes shareware’s secret weapon and puts it in Bill’s products: “Pay for a code and activate me or I will stop working.”   I’m glad my car doesn’t treat me like that.