I've accepted product activation from Microsoft and tolerated the manual Validation system that Microsoft now requires before downloading from its site. Now, however, Microsoft has gone too far with Windows Genuine Advantage Notification, spyware from the "trustworthy computing" company.
Want to know more? The best place to start is Brian Livingston's article Genuine Advantage is Microsoft spyware in his excellent Windows Secrets Newsletter. No subscription is required to read Brian's most important writings on security and stupidity.
I also commend you to a pointed and chilling article by the late Ed Foster, The Last Genuine Copy of Windows XP.