Imagine that you're sitting quietly in your living-room at your PC, perhaps watching YouTube. Suddenly, a pair of big, burly guys barge into your house and demand that you let them check your computer to make sure that it's "genuine" and not running pirated software. You protest that you bought it fair and square, but they're insistent -- so you give in and let them proceed.

Even though you insist that you bought your laptop from the retail computer store down the street many months ago, and didn't install any pirate software, the visitors declare that your computer "isn't genuine" according to their latest pirated systems lists, and they say that "while we'll let you keep using it, we're modified your system so that it will constantly nag in your face until you pay up for a legit system!" And they head out the door to drop in on the eBay-loving grandmother next door.

You then notice that the wallpaper on your PC has turned black, and these strange notifications keep popping up urging you to "come clean."

Ridiculous? Well, uh, actually no.

[...]

The release of Windows 7 "Update for Microsoft Windows (KB971033)" will change the current activation and anti-piracy behavior of Windows 7 by triggering automatic "phone home" operations over the Internet to Microsoft servers, typically for now at intervals of around 90 days.

The purpose? To verify that you're not running a pirated copy of Windows, and to take various actions changing the behavior of your PC if the WAT system believes that you are not now properly authenticated and "genuine" -- even if up to that point in time it had been declaring you to be A-OK.

Note that I'm not talking about the one-time activation that you (or your PC manufacturer) performs on new Windows systems to authenticate them to Microsoft initially. I'm talking a procedure that would "check-in" your system with Microsoft at quarterly intervals, and that could take actions to significantly change your "user experience" whenever the authentication regime declares you to have fallen from grace.

These automatic queries will repeatedly -- apparently for as long as Windows is installed -- validate your Windows 7 system against Microsoft's latest database of pirated system signatures (currently including more than 70 activation exploits known to Microsoft).

If your system matches -- again even if up to that time (which could be months or even years since you obtained the system) it had been declared to be genuine -- then your system will be "downgraded" to "non-genuine" status until you take steps to obtain what Microsoft considers to be an authentic, validated, Windows 7 license. In some cases you might be able to get this for free if you can convince Microsoft that you were the victim of a scam -- but you'll have to show them proof. Otherwise, you'll need to pull out your wallet.