I have no way of determining if this is true, but this geting some attention
Windows SP2 Denies Access to Illegal CD Keys
"This time around Microsoft may have found a much more destructive way to get rid off Illegal copies of WindowsXp than Service Pack1. Users installing SP1 on illegal copies would simply get a 'This is a pirated copy' error message. But now Microsoft has armed itself with a huge list of illegal CD keys ensuring that not only does the SP2 not install, but also destroys the computer hard drive by rendering it unusable."