it was a fresh install the validating is for windows update from microsoft's site. the os will still update no matter what, i just wanted to see what other updates where out. and you can only do this by validating. I've never ran into this problem, and everything in the regedit is right. so now i'm at a lost, install went fine no problems. Also i don't register any copy of windows, theres no point in doing so in my opinion. so the whole phone thing is to register, all you have to do to use windows is activate it. which doing online is quick and easy which i did with no problem with this copy of xp-pro.
DT:Custom intel Pent. D 802 2.66 oc to 3.06, asus P5N32-E SLI Plus, 1gb G-Skill DDR2 677, Geforce 7600GToc 256, seagate barracuda 7200.8 sata 250g, XP Pro (custom dt skin) and etc...
LT:Gateway M680XL w/1.8ghz centrino (my workhorse)