Didn't have 1,000 licenses to do (only a hundred or so), but, wasn't asked for the License key on Any of them. Actually, with Microsoft's Autoupdate, got some calls, about whether this update was legit, and something they should let run, during their lunch break (;->>
The Service Packs are patches, to update your already licensed version of Windows Xp.
This was a Corporate Volume License agreement from Microsoft.
Hmm.. You did say that your pcs weren't preloaded (with OS??). My company purchased computers with OS installed. Still, as I said, you were updating Already installed (licensed) computers, with a Patch, so, why would they stop booting? Activation should only have to be done Once; unless you make Major hardware changes to the pc. It then thinks it is a Different computer.