By the sounds of it you have downloaded the verification tool that Windows have now got out. Prevents any further updates than SP2 I think until you have a legitimate key of some sort.

We have volume licensing at work fortunately although all on 2K.

I had this issue about 6 weeks ago and just went and bought a legit copy as I run a business anyway. Didnt want to get stung for not having a legit copy as there are big incentives here for people to report pirate users, mainly businesses though.

New version of XP Home here is cheap.