A Microsoft whitepaper (opens in new tab) revealed that the company is to ease the registration rules with the forthcoming Windows XP Service pack 3 which is set to be released in the first half of 2008.
The document dubbed, Windows XP Service Pack 3 (opens in new tab) overview, states that "As in Windows Server 2003 SP2 and Windows Vista, users can now complete operating system installation without providing a product key during a full, integrated installation of Windows XP SP3, The operating system will prompt the user for a product key later as part of Genuine Advantage."
The 30 day grace period is similar to what Windows Vista users get and will display nagging notices to users to "coerce" them into purchasing a valid licensed copy of the operating system.
Microsoft also uses its Windows Update service to track down illegal copies and regularly updates Windows Genuine Advantage, its product activation and Anti Counterfeit technology.
Vista SP1 however will have a reduced functionality mode which is more stringent than XP SP3, disabling most features and effectively dumbing down the OS.