On every single machine that I have replaced hardware on, and then the OS says it needs to be activated, or even if I have replaced the whole machine and used the same copy of XP. A phone call to MS telling them that it is a replacement for the old machine, they have regenerated the activation key for me. Not a single problem in all the years since XP came out. The Customer Services section at MS, expects you to upgrade/replace your machine. As long as your old machine goes into retirement, then there is no problem. :) The sales guy telling you to re-purchase the OS, is an idiot or trying to increase his profit margin....more than likely both :)