A. All versions of Windows Vista and the non-volume license version of Windows XP have a grace period, during which you can use the OSs without activating them. (The period is 30 days for client OSs.) At the end of this grace period, the installation goes into a notification mode, telling the user their OS is not "genuine" and, in Windows XP, going into a reduced functionality mode. If you're creating a custom image that will be duplicated, you may take a few weeks creating the custom image, which takes that time out of the grace period's remaining time. If you duplicate this machine, the installations will have a shortened grace period.
To combat this shortened grace period, Sysprep performs a "rearm" on the installation, which resets the grace period back to 30 days. Each installation of Windows can rearm three times.
If you want to perform Sysprep testing without resetting the grace period and performing a rearm, you can pass Sysprep the skiprearm switch. Installations from an image created this way won't be rearmed, but you can still use Sysprep to test the installations' out-of-box experience.
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Check out hundreds more useful Q&As like this in John Savill's FAQ for Windows. Also, watch instructional videos made by John at ITTV.net.
