Thanks for all the support, guys!
Unfortunately, it turns out my original product key was for XP Home and I was running XP Pro. We knew this when my dad rang their office. They hardly listened to our story and weren't remotely interested. They then said we had one option - is it an option if we have no other options? - and trapped us into paying £92 for a new product key.
However, it was worth it: the OS was converted seamlessly without trouble. What I don't like is some people who don't pay for product keys ever, complaining that Microsoft are too rich. But there's always a day of reckoning, right? People should know when to buck up and cough up the dough. They're a super business, what do we expect?
But ... Oh, yeah, I think the WGA tool was ransomware in a way. Pay us or we will litter your PC will crap. Serves us right, I suppose.
What's everyone else's opinion?