The Windows Genuine Advantage (WGA) has come under intense scrutiny, mainly because of questionable actions like home-calling and mis-identification of software pirates. Microsoft wants to stop rumors stating that the WGA falsely identifies legitimate users as pirates. According to WGA team member Alex Kochis, "Of the hundreds of millions of WGA validations to date, only a handful of actual false positives have been seen."

Of the estimated 300 million PCs with the WGA tool installed, Microsoft statistics show that one in every five PCs fails the test. From those that fail, 80 percent are due to a stolen volume licensing key. The other 20 percent of failures occur thanks to a hodgepodge of reasons including tampering, hacking, and broken installations. Kochis says that users who claim to be running genuine copies of Windows but are still caught by the WGA fall right into the previous criteria, although they may not why.

Typically, someone who believes that their copy of Windows is genuine but is trapped by the WGA can be placed into one of the following four categories.

* A person purchased what was believed to be a genuine Windows distribution, but was actually counterfeit
* A second PC was illegally activated with a single licensing key
* A friend offers to repair or enhance a PC with a free upgrade, but installs the upgrade with an illegal key
* A computer repair shop, as part of a restoration, installs the wrong version/edition/installation for the given system. WGA consequentially detects the mismatch and fails the system.

Each scenario mentioned above is considered software piracy by Microsoft.

Microsoft claims that it takes every report received from WGA feedback very seriously. It has a team designated to investigate each assertion individually, and many times it will give the customer a valid copy of Windows just for detailing how he came across the unauthorized version of Windows in the first place.
via Link

There are far too many reports of mis-identification to simply dismiss them. The sluggishness to respond to user's concerns worldwide makes me wonder whether WGA is turning out to be a fiasco like Sony's DRM Rootkit.