Disk2VHD, Tells me Windows is not Activated, Next Activates and tells me Windows is activated, then, repeats

This is completely normal for an OEM installation of an OS, when it's P2Ved!

Original Equipment Manufacturers (OEM) versions

Note: Physical-to-virtual hard drive migration of a Windows installation is a valid function for customers with Software Assurance and full retail copies of Windows XP, Windows Vista, and Windows 7. Software Assurance provides users valuable benefits—please contact Microsoft Corporation for further information. Windows XP, Windows Vista and Windows 7 installed by Original Equipment Manufacturers (OEM) using OEM versions of these products may not be transferred to a virtual hard drive in accordance with Microsoft licensing terms.

Source
http://technet.microsoft.com/en-us/sysinternals/ee656415

https://www.experts-exchange.com/OS/Microsoft_Operating_Systems/Windows/XP/A_3721-Can-I-transfer-my-OEM-version-of-Windows-to-another-PC.html

Depending on the Country of your Origin, I would call Microsoft Licensing for Activation help, and to insert your product key.

Thanks for the quick response. However, I cannot enter key because of the loop--must be activated--activated--must be activated. I cannot figure out a way to break the loop.

I think what you must do is look for new software that runs on modern OS's and that can replace the ancient stuff of which nothing is supported anymore.

Meanwhile, while you search the market for that, in order to keep the customer running, look for one or more 2nd hand PC's of the same model as the original (via ebay or a similar portal), then restore the original PC's disk image to that (or those) PC's, so you have spares to replace should the original die, and until you have found a software replacement. That should avoid the activation problem as the replacement hardware is the same as the original, and should should even work with OEM OS's.

I'm afraid overcoming an activation issue, is a gray area, when it comes to the licensing.

Does it also do this in Safe Mode ?

Yes. The same thing happens with safe mode.

I would discuss with Microsoft licensing, because if they tell you you cannot do this, because you are in breach of the agreement, you cannot do it.

Try an inplace upgrade of the XP virtual with a Volume License copy of XP.  You should be able to preserve all of the settings/programs and then you can activate it with Microsoft.  A retail copy would probably work as well.

The OEM copies are BIOS locked and the virtual BIOS doesn't have the correct Dell strings, so it will never work or activate as it is.

ok

His last post suggested using the VL edition of XP was the answer, but the business owner didn't want to take a chance on that solution and wanted to go with Windows 7 instead with upgrading the factory software.

Original question stated: "Program cannot be installed on Windows 7".  The solution however is to "Upgrade to Windows 7".  Yes, that is totally the correct solution to the problem originally presented.

for info,.....

Microsoft never intended OEM software to be moved between computers. - FACT.

If the computer is disposed of, the software license is part of the hardware, so the OS license disappears as well.

However, in Europe this was challenged, and Microsoft therefore agreed OEM was no longer valid in Europe, but other Countries are different.

We have known clients call Microsoft Activation, and Microsoft Licensing have talked users through the Activation of OEM products after a P2V..., however, we've also learned sometimes Microsoft Licensing/Activation have refused.

Sometimes, entering the OEM Product Key again works, sometimes it does not.

Upgrading and Re-installing over the existing OS, sometimes works, sometimes breaks the OS, and it's configuration, and sometimes it still does not activate using Retail or Volume license keys...

and then there is the Hack Option, which we cannot discuss on EE....

This question comes up all the time with P2V of OEM software....and the Answer is the same, if you try long enough you will succeed....

but EE Experts cannot discuss how to break Microsoft's License Activation....

In the industrial sector, there are still many XP systems at the heart of manufacturer process control. Many of these pc's are not attached to the network, they just monitor/control processes. The OEM model has left them stranded as far as keeping these systems up and running. You cannot (without a lot of effort)  perform a bare metal backup to newer systems with SATA drives. But, if these systems could be virtualized, they could run within a new Windows 7 (10?) system without the users having to either have the entire system re-written (in the case of custom built software) or having to spend large amounts of money (in the case of my client, way over $10,000) to get the system to work with Windows 7. Why does MS even care about XP licenses any more? If your are going to run a virtual pc, you have to buy a new system with new software as the host. XP was legally purchased by the company.  Give us a break MS.

I know this were also work in the Semi-Conductors industry across the world, where all the robots, are controlled with legacy PCs, in CAM control, and serial ports!

As I said, there are ways and mean, but they cannot be discussed on EE, because we would be in breach of the EULA.

OEM was never meant to be used in business environments, it is a consumer product, and it's limitations have always been known. That XP support would end last year was also known a long time ago. There has therefore been plenty of time for your client to prepare for the future. In my point of view your customer is fully at fault if he gets into this type of dilemma. With a little bit of planning, not getting OEM software in the first place, and replacing unsupported stuff in a timely fashion could have avoided these problems.

Accept https://www.experts-exchange.com/questions/28655777/Disk2VHD-Tells-me-Windows-is-not-Activated-Next-Activates-and-tells-me-Windows-is-activated-then-repeats.html?anchorAnswerId=40765211#a40765211 as the answer.