I'm not a Windows user myself (apart from a single machine at work for Outlook and Photoshop), but I've heard a lot of complaints about activation and how upgrades can interfere with that.
The licensing model is broken, by tying an installation (a serial key) down to one machine everything becomes very fuzzy... you don't have anything tangable to prove that you're not running your licensed version on more than one machine.
Sure dongles are out of fashion, but their cheap, most of the worlds WinTel machines have USB support, their cryptographically sound and it's something tangable that can be carried around, sold or.. used on multiple machines.
The main thing which has made me think about using dongles for operating system licensing isn't only the prohibative cost of a Windows XP/Vista license, but that most business machines are turned off when home machines are turned on.
Lets take the case of a usual office worker, in the morning they might check their e-mail or social networking apps, then they turn the computer off - it's no longer being used. At work they turn the computer on and do their stuff, then turn it off before coming home etc.
If we introduce dongle based licensing, the company buys one Professional Edition license which the employee is free to take home out of hours, this might be loaded with licenses for all the software thats being used at the office (Word, Photoshop) and might be required to be used at home in emergencies or whenever needed.
I think I still have to think about this one.. but it's an interesting subject...
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