Microsoft TechNet Article Deploying Windows XP Using Windows Product Activation contains the following introduction:
Microsoft® Windows® Product Activation (WPA) is an anti-piracy technology designed to reduce casual copying and hard disk loading. WPA will apply to all 32-bit versions, except volume licensing, and to all distribution channels.
WPA is primarily of interest to retailers and System Builders for the following reasons:
• Direct original equipment manufacturers (OEMs) usually choose to implement a version of WPA that will be locked to a machines firmware (BIOS). This bypasses activation by effectively pre-activating these machines.
• Windows Product Activation is not needed in 64-bit versions of Windows XP. (Considering this, none of the automation functionality described in this article is relevant to 64-bit systems.)
• Volume Licensing (VL) media—often referred to as select media—do not require activation. As a result, VL customers (Enterprise, Select, Campus, School, and Open) will probably not find much applicable information in this article. Setup does require entry of an organization's unique product key, which is generally provided in an answer file. Note: In the past, VL customers often used retail and VL media interchangeably. Windows XP no longer permits this: retail media must now be installed using retail product keys, while VL media must be installed using VL product keys. The ProductID (PID), discussed below, can be used to determine whether the correct media is installed on a machine.
• Evaluation media do not support WPA automation and are not considered in this article.