If Vista Product Activation detects a licensing problem, Vista enters "reduced functionality mode". Reduced functionality mode doesn't affect your data, but it will not let you run many of your applications without first entering the product license key.
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Vista Product Activation

Product activation in Windows Vista is similar to Windows XP, except that you don't need to provide the product license key during installation. Vista uses Microsoft's "Windows Genuine Advantage" (WGA) alternately referred to as "Windows Genuine Disadvantage" technology to monitor for licensing violations.

You can install a specific copy of Vista only on one computer at a time. If your OEM computer came with Vista pre-installed, you cannot move Vista to another computer. You can reinstall and reactivate the same copy on the same computer as many times as you like.

If you install Vista on a new computer, you have a two-week grace period before Activation. It's best to install all the hardware you'll want first before you activate Vista. You can uninstall Vista from one non-OEM computer and move it to another computer as many times as you like.

If WGA detects a licensing problem, Vista enters "reduced functionality mode". Reduced functionality mode doesn't affect your data, but it will not let you run many of your applications without first entering the product license key. To permit product activation, your Web browser and email will still work in reduced functionality mode.

Vista will run for only one hour in reduced functionality mode, then it automatically logs you off. You can log back on to work for another hour as many times as you like. You can boot to Safe Mode and work with any programs that work in Safe Mode for as long as you want.

If, after Product activation, WGA detects a licensing problem, possibly because of a new hardware installation, it generates annoying popups informing you that it judges your copy of Windows to be pirated. It allows you a three-day grace period to fix the problem before entering reduced functionality mode.

How to move Vista from one computer to another computer

Microsoft doesn't want you to move Vista from one computer to another computer because then you would have two computers running activated Vista when you paid for only one CD. To move Vista activation, you have to go through the aggravation of calling Microsoft on the telephone.

Microsoft cares little about how much aggravation they put Windows users through, as long as they can continue the unmitigated price gouging of a government condoned monopoly.

If you really want to move Vista, after installing Vista on the new computer, run Windows Activation Wizard Start | Computer | Properties | Windows Activation. When the activation screen comes up, click on "Telephone Activation". The toll-free phone number for Microsoft's Activation Customer Service will appear.

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