The truth is, Microsoft hasn't announced any such thing. Instead, skipping that all-important step, it has included some declawed user interface elements of its forthcoming copy protection technology--officially called Windows Product Activation (WPA)--in the latest beta of its forthcoming version of Windows, Windows XP.

For most of us, especially those of us in the IT trenches who haven't seen copy protection in any version of Windows since it first came out (who would want to copy that debacle?), the sudden appearance of something so controversial and historically gut-wrenching was cause for concern.

Indeed, ZDNet users expressed a range of emotions at the news. Some commented that one of two things might happen: either Microsoft will drop the copy protection after customers threaten to adopt Linux en masse or someone will crack it.

But others zeroed in on the potential "gotchas" that could foil the daily machinations of any well-oiled IT shop. For example, what happens when systems must be reconstituted from scratch and the nearest copy of Windows is already in use on another system? Or what about system images that are built using the Ghost utility and then deployed across multiple corporate systems?

As it turns out, it appears that Microsoft has all of its bases covered. Not withstanding the question of its legality (see my column on ZDNet AnchorDesk for more), I've searched high and low for a snafu in WPA, but have yet to unearth anything worth calling home about.

Abort, retry, ignore?

To the end user, WPA should take the form of an innocuous couple of simple keystrokes and clicks. However, what happens behind the scenes is anything but simple.

Microsoft has something that internally it calls the license clearinghouse. It's a database that tracks the marriage between individual copies of software and individual systems--a marriage that is consummated the first time the software, be it an operating system or application, is installed on a particular system. In the same way that two humans can join to create a unique genetic code, this marriage of software and hardware creates a unique installation ID (also called the product ID).

If you've installed any Microsoft software recently, perhaps you recall seeing a product ID displayed at some point during the installation process. In fact, clicking on "About" in the Help menu of most Microsoft applications will also display this ID.

The software's contribution to this unique genetic code is the product key. The product key is most often found on orange stickers affixed to the back of the CD's jewel case. The hardware's contribution to the unique genetic code is what Microsoft calls a hardware hash--a calculation based on the system's primary attributes, such as processor type, hard drive, and display adapter.

Once WPA is fully deployed, in addition to installation ID, product key, and hardware hash, installing Microsoft software will require a fourth piece of information: the activation code. Users can get an activation code via the Internet, by dialing in to the license clearinghouse during the installation process, or by calling Microsoft customer support. In each case, you must supply Microsoft with your installation ID (either electronically or verbally) to receive a valid activation code. Attempts to marry a product key with more than the allowed number of hardware hashes will not be rewarded with an activation ID.

For example, in the case of an operating system like Windows XP, the allowed number of such marriages is one. In the case of Microsoft Office, the license permits end users to put it on both their desktop and notebook, so we can assume two marriages are permitted.

Once activated with a valid activation ID, the software will be fully functional. In the case of the operating system, the software will operate for 30 days without an activation ID. But attempts to log in after 30 days will not succeed. At that point, you have one of two choices: supply a valid activation ID or uninstall the operating system.

But what if you have to wipe a system clean and reinstall the software, but you can't find the original CD with its product key?

Answer? Grab any Windows XP CD and reinstall. This is made possible because the product key that was originally associated with the system now appears somewhere else besides the jewel case--on the system itself.

While Microsoft may have hastily thrown some of the WPA interface code into the latest beta of Windows XP without adequately reaching out to explain how it works, it has actually been sowing the seeds of WPA since 1997. As a result, all new systems that ship with Windows today have the Windows product key affixed directly to the chassis. Sure enough, when I ran down the hall to verify this with our IT chief, he flipped his notebook over (he always has the latest stuff!), and there it was--a mini-Microsoft Certificate of Authenticity with a product key that was practically super-glued to the system.

If the OS needs to be reinstalled, you can read the product key right off the certificate that's affixed to the chassis when prompted during installation.

No worry for corporate shops

Concerns that an OS reinstallation might fail because the hardware configuration has changed enough to alter the aforementioned hardware hash (thus making the clearinghouse think it's a different system) is a non-issue, according to Allen Nieman, Microsoft's product manager for licensing technology. "The system has to be completely overhauled--meaning processor, hard drive, everything--before the changes are enough to deny an activation code. In cases like that, a phone call to customer support will resolve the problem."

While this of course covers OEM systems--systems from Dell, Gateway, IBM, and the like with the OS preinstalled--upgrades will still rely on the product key that comes with the CD. If you lose the key, Nieman says Microsoft's customer support has some flexibility to help you out. My advice? Guard the product key with your life.

For businesses and corporate IT shops looking to upgrade systems en masse, WPA is virtually a non-issue. If you're in that class, you shouldn't be procuring upgrades from local computer stores one at a time anyway. Instead, one of Microsoft's volume licensing options, which start at as few as five licenses, is much more appropriate. Not only is it more cost-effective, but the Microsoft clearinghouse will not be tracking installations under volume license agreements. "In those situations," Nieman says, "companies will be left to themselves to police their compliance."

For corporate IT, or even small to medium businesses, WPA simply won't be a factor--not if they're smart about how they procure Windows in the first place. IT shops can relax knowing that their relationship with technology vendors is, and likely always will be, a lot cozier than what the public gets.