Helping people with computers... one answer at a time.
Installing SP2 won't necessarily report an illegal Windows installation.
If install SP2 onto an illegal copy of XP Pro, in addition to a legal Home version, will it "call home" with news of the illegal version? Will it send Microsoft information about the computer, where it is and so on? Might all of their prepaid CD's have registration signal or something, to track it? In other words, not good idea install sp2 in non registered windows?
The short answer is that it's not a good idea to have an illegal version of Windows, period. Besides being illegal, it's unethical. If you object to Microsoft's pricing or strategy or whatever that you refuse to purchase a legal copy then use a different operating system. There's plenty of good, free, alternatives.
But to get to your question, like E.T., will SP2 "phone home"?
First, I don't believe that the CD's of SP2 Microsoft Ships out are serialized or encoded with any ID. I believe that all the SP2 CDs are identical.
Second, if you're afraid of SP2 reporting to Microsoft during the setup process, then disconnect from the net while you upgrade. If you've got the CD the internet shouldn't be required.
Thirdly, I don't believe that SP2, Windows, or whatever "reports back to Microsoft" even after it's been installed. I know many folks are paranoid, but there's never been any evidence of this kind of activity.
Finally, and perhaps more relevant, is that there have been reports that Microsoft will disallow future patches and upgrades to unregistered versions. The bottom line is that if your copy is illegal, then you aren't entitled to updates. This will require a little detection when you attempt to install an update.
So the bottom line is this: if you're illegal, you're on your own. If you're paranoid (and since you're asking the question, I'll assume you are at least a little), sure, Microsoft could try to identify your machine. But even if you're not, eventually running an illegal copy will prevent you from getting the updates you may someday need.
My advice? Get legal. Register. Then there's simply no issue.
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