"Good afternoon, as of this week, Microsoft has activated a function in Vista called 'Reduced Functionality.' This is a specific function in Vista that effectively disables non genuine copies of Windows. Therefore anyone who has a pirated copy of Vista will experience:

A black screen after one hour of browsing
No start menu or task bar
No desktop

Please communicate this anti-piracy initiative from Microsoft to your resellers -- note this function has only just been activated in Vista worldwide and therefore any issues with non genuine versions will start to arise from now onward." (link)

Embedding this type of, presumably network activated malware, into a critical operation system is unresponsible.

The very recent WGA blackout, that would let anyone activate Vista, no matter if it was a fully legal version or not, shows the very real problems, that will arise from Microsofts anti user policies.

However sporadic failures from Microsoft, that might disable millions of desktops for days on end, are bed, but a malicious malware targeted at Microsoft kill switch would be disastrous. 

It is extremely arrogant and monopolistic to implement this type of functionality in Windows.  If consumer felt they had a choice of an operating system with a kill switch that works most of the time, or an operating system where the vendor trusts the customer, such practices would not be viable.

It is important to point out that the kill switch feature is not something that can only be activated by installation. Microsoft has for a long time implemented features in the operating system that will poll Microsoft servers regularly to ensure that the operating system is still valid. So you can be fully installed, and have been working for two years, before Microsoft decided to flip the kill switch.

It would only take one bad patch from Microsoft, or one malware storm, to demonstrate to the world, the consequences of Microsoft's arrogance.

Imagine every desktop in 30 large companies, suffering the effects of the Microsoft’s kill switch, as the result of an employee or two opening the wrong attachment.  The financial impact would be vast.