Does that new Windows Activation update really 'phone home'?

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So, here is a summary of what the KB971033 WAT update does, with all details confirmed by a Microsoft spokesperson today:

* The purpose of the KB971033 WAT update is to verify that the Windows system licensing files haven’t been tampered with. It does so by comparing those files against a list of changes associated with known activation exploits. It doesn’t check your product key or the state of your hardware.
* You can refuse to install the update when it’s offered. You can hide it so that it is not offered again. You can uninstall it after it is initially installed.
* The update runs locally.
* After the update runs, it sends a status report back to Microsoft, including information that can be used for aggregate reporting. The report indicates whether the installation was successful. It also includes the result of he validation check, including “information about any activation exploits and any related malicious or unauthorized software found, disabled or removed.”
* The status report does not include your name, e-mail address, or any personally identifiable information. It is not tied to your IP address. Any pieces of information that are unique to your computer, including the Windows product key and hard drive volume serial number, are hashed using a one-way algorithm. (A one-way hash produces a consistent result, but the hashed result cannot be converted back to the number it started with. It’s the same principle used to calculate MD5 hashes of executable files, documents, or digital media files. A one-way hash cannot be used to reconstruct the input data, only to verify it.)

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http://blogs.zdnet.com/Bott/?p=1788

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