I have the exact same problem.
A client dropped his netbook on the floor and had a cracked screen and a bad HDD. Replaced them both.
As he didn't have an installation disc, I used a Win XP Home OEM disc and used his product key during the setup. Everything went fine, as usual. I always do the exact same process with XP, Vista and 7. If the person has an OEM key it will activate from a OEM disc - even though it's not the one given by the manufacturer (in this case, Toshiba). The only difference is that if doing this with Win7, you can't activate online and must call that phone number they give you at that wizard screen.
Anyways. My install was perfect. Everything went smooth and etc.
When it rebooted for the last time and asked to confim if I could "see that box on the screen", the problem began:
I got a window saying that "you must activate Windows before log on - Do you want to do this now"? I select Yes and it offered me three options:
1) Yes, I want to activate online (impossible as I didn't have the network drivers installed)
2) Yes, I want to telephone
3) Log off
I selected the option "I want to telephone" but the installation ID number was not there. I had a blank gap, with nothing on it. I called anyway and got the automated service. After pressing a million buttons on my phone, I got through a person who said he couldn't help because there is no installation ID. I had to call on Monday (today is Saturday) some other department in order to get help. That was not an option as I needed to return this laptop to my client tomorrow (Sunday).
Whatever option I picked, would lead me to the same "You must activate windows" screen.
Somehow, after several reboots, it loged on. Don't ask me how, but it did.
Then, I installed all the drivers, without rebooting. When I rebooted, I got back to the same "You must activate windows".
1) Formatted the hard drive
2) Installed Windows XP Professional
3) Cracked and made a few changes to the registry
4) I'm just installing the lastest updates now.
I am so happy that I use Linux. So bloody happy. And I am even happier because Windows exists. Otherwise, computers wouldn't stop working and I'd have no job at all.
Thank you Microsoft for being so incompetent. Without you, I'd be starving without a penny in my pocket.
Honestly. If a guy from Microsoft offered me a copy of Windows 7 Ultimate for free, I wouldn't accept it. Windows has always been a piece of you-know-what. I'm on Windows at this very moment, but it's only a virtual machine. Microsoft websites don't like Firefox very much and make everything difficult. They trully believe that IE is a good product.
Sorry for the rant, guys. I'm not even from this forum but I get so stressed with this Microsoft stupidity that I had to shout at someone.