Licence Problem

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My boss wants me to find info on this but i cant find any so i'll ask here.
He did something that he used his factory restore and got his windows 98
back up but when he tryed to reupdate his os to xp it said the automated
activation system told him his number was used. Well he used it when he
updated the computer the first time. Other then that i dont know what he
did. What should i tell him?
.



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