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Despite its best efforts, Microsoft's activation server gets cracked

Despite all the talk surrounding its security and beefed up anti-piracy measures we all knew that it wouldn't take long for hackers to take a stab at Vista's activation scheme. Cracked copies of Windows Vista started flooding the internet soon after the operating system was released to manufacturing and ahead of its official release.
Microsoft's new Volume Activation 2.0 system requires that each copy of Vista for volume licensees be activated through Microsoft servers. This wasn't the case with Windows XP numerous pirated "corporate" editions of the operating system flooded the internet.
Microsoft's solution for making Volume Activation 2.0 easier for administrators has been attacked, however. Hackers have spoofed Microsoft's Key Management Service (KMS) server which allows corporations with 25 or more networked computers to activate Vista installations. The software hack is making the rounds around the web and in a nod to Microsoft Chairman Bill Gates is named after his wife, Melinda.
According to reports, the software hack uses a VMware image of the KMS server to activate copies of Windows Vista Business and Enterprise. APC Magazine reports:
The download is a VMware image, and the idea behind it is that you download and install VMware Player (a legal free download), boot the image and use some VBS script (supplied with the activation server download) to have the client Vista machine get its activation from the local server. And that’s it -- no communication back to Microsoft.
But for those that think that all of their problems are solved with this software hack, you may want to hold your horses. A valid KMS product key is still required and the activation is only valid for 180 days.