Microsoft licensing technologies lead product manager Allen Nieman (Mr WPA) has denounced last week's WinXP product activation revamp story as FUD, a rumour that is "entirely untrue," and that has been "parroted by some folks without validating with us" (by which we fear he means us). As it turns out, the tests on which the "rumour" was based had one fatal flaw - they did not distinguish between corporate and non-corporate versions of XP SP1, and so when a non-corporate SP1 was slipstreamed (i.e., applied in combination with an XP install) into a corporate XP, the installation was turned into a retail XP Pro one, and the corporate keys - naturally - didn't work.

Nieman made a posting to an SP1 beta group on Friday, saying: "Here's the deal: There is no truth in this rumor. We are not changing the way volume licensing customers install or deploy Windows XP. We are not issuing volume licensing customers new product keys. Volume licensing customers are not impacted by any of the changes we are making to activation in SP1. The only folks impacted by the changes we are making in SP1 are people with illegal copies of Windows."