Microsoft introduced Windows Genuine Advantage (WGA) in Windows XP. WGA acts as an anti-piracy measure for Windows. In XP it made a lot of sense for Microsoft, because XP required a product key during the install. For pirates that meant finding a key online. This was tricky, because keygens for Windows just don’t exist, so any key that they would find would be used by hundreds (or thousands) of other pirates. This made WGA easily pick out pirates and act accordingly. Vista and 7 don’t require product keys during the install, but give a 30-day grace period between the install and when WGA kicks in. WGA’s behavior when it identifies a copy of windows as “not genuine” has changed even within different service packs.
I believe WGA in XP is basically just a nag from the system notification area. In Vista RTM (pre service pack 1), WGA would disable AERO when the user logged in and only give an Internet Explorer window for the user to purchase a key. (Of course, the IE window allowed the user to open up the command prompt to do various things to get the system back without paying, but that’s not what this post is about.) Vista SP1’s WGA behavior was less of a show-stopper, and did allow the user to get to the desktop and use the computer semi-normally, but onto the Windows 7 behavior.