is regestering windows necessary?

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After windows installs, let it boot once. Dont' activate or register it. on the desktop right click and go to properties. the screen that comes up should give you all the information you need to know about your copy of windows.
 
What happens after activation ? You can't change your videocard or something similar like that, or Windows will not work again?
What after you have to reformat the puter and do a new XP install ? Does it activation again?
 
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