The activation makes a list of your hardware profile, creates a unique identifier from said list algorythmic ritual, then combines that number in with the activation code thats on the package, then ships that all off to a MS server where it registers it. It actually shows the code to you when you have to register over the phone. If you change out enough hardware on your box, it will deactivate the activation on your system. Usually, just going through the activation wizard again will fix that problem. If it doesn't, just call the activation hotline and the MS support can fix it for you.
Hey... Whats this soul.dll thats being transferred?