Well, I activated it, but, as I said, I had to do it by phone. You are prompted to enter an enormous installation ID from the screen. I think it's 43 numbers long (should have taken a screen shot). Then, an automated voice reads a confirmation ID back to you, which is 43 numbers long, and you enter it as it's being read. At one time, this used to be done by a real person. I imagine that was not the most rewarding job in the world. With that confirmation ID entered, you can finally activate the installation. Much nicer when it's all done online in a fraction of a second.
On top of this, every Windows installation has to be "verified" as "genuine." It's like a second activation, as updates are blocked without it. Installations cannot be "verified" until they are first activated.
Clearly not the kind of thing you want to do very often.
As for why I had burned through my online activation limit: First of all, I didn't know I had one, so I wouldn't think twice about reformatting and reinstalling; second, when XP was younger, it was COMMON to have your browser and then your entire system hijacked thanks to the ActiveX scripting permitted by Internet Explorer. The use of other browsers wasn't common. Malware and virus protection wasn't as responsive as it is today. Throw in driver problems, occasional hard drive failures, software conflicts, and the need to reinstall back in those early days becomes a little more understandable.
I have one program that only works under XP, and it's a good one. I have a wonderful laser printer and a scanner that both never saw new drivers. Aside from that, the XP box allows me to run media applications apart from my regular work and play. I don't use it for much else, though it came in handy when the video card went out in my newer machine. When everything's working, it's very convenient.
I am at the point where updates are harder to manage. I wish I had done this a year ago, before they ceased.
I really wish I had that image SBMfromLA mentioned, above. That would have made this a breeze. I really want to thank him for bringing it to my attention.
Doubt I'll ever do this all again. I can see my Windows 7 machine taking the place of the XP machine when I build my next system.