Product Key from Microsoft will not Activate Windows 7 Enterprise

The Enterprise editions of Windows 7 (as well as Vista) will utilize two of the following three key types (plus a special "custom" type), and when you expand the product keys in the MSDN Subscriber Downloads for a particular product, it should tell you what type of key it is.  The keys are:

• RTL (Retail) - usually good for one or two activations.  This is identical to the key type you'd get if you bought Windows at your local Best Buy. 
• MAK (Multiple Activation Key) - This is a product key you can get with an Enterprise edition.  MAKs are good for many activations of a product (usually at least 10).  The number of activations can be variable; this is typically determined when a company buys licenses from Microsoft.  For example, if a company has 15000 users, they'd likely buy a MAK with at least that many users. 
• KMS (Key Management Server) - This is a product key you can get with an Enterprise edition.  This one works by installing an enterprise key on a Key Management Server in your corporate intranet, and setting up appropriate SRV records in your corporate DNS.  The key is activated with Microsoft, and all Windows enterprise clients contact the KMS every 90 days for activation.  The clients do not need to contact Microsoft directly; they communicate only with the KMS, provided your KMS SRV records are set up correctly.  To use KMS, you must have a minimum of 25 licenses. 
• CUS (Custom) - Most MSDN subscribers cannot get to this.  If you click on this one, you will usually get directed to a logon page that is typically reserved for your company's volume license coordinator (i.e. for Software Assurance).  These kind of keys are usually ones that companies guard very closely and do not want released to their user base.  (In most cases, Custom keys are actually either MAK or KMS keys that are used for production, instead of development, use.)  You'll only see this if you get MSDN through a subscription purchased by your company. 

So for the case of using an Enterprise edition of Windows 7 or Vista, you cannot use an RTL key.  You must use either an MAK or KMS key.  Even the server OSes 2008 and 2008 R2 will default to KMS, and will run in a "grace period."  If they can find a KMS with a product key for the respective OS, they'll utilize that key and activate themselves.  (Vista will activate against a Vista KMS key, but Vista will not activate against a 7 KMS key.)  If an appropriate key cannot be found in KMS, or if no KMS server exists, you must supply a product key and activate within the grace period, or Windows will revert to Reduced Functionality Mode at the end of the grace period.

Since Windows Vista, all license keys require activation, whether to Microsoft directly or via a KMS.  This is unlike earlier OSes, where VL keys did not need activation.

Best regards,
Matt