Caporegime
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How does it work? Once installed, the Update protects customers by identifying known activation exploits that may affect their PC experience. If any activation exploits are found, Windows will alert the customer and offer options for resolving the issue – in many cases, with just a few clicks. Machines running genuine Windows 7 software with no activation exploits will see nothing – the update runs quietly in the background protecting your system. If Windows 7 is non-genuine, the notifications built into Windows 7 will inform the customer that Windows is not genuine by displaying informational dialog boxes with options for the customer to either get more information, or acquire genuine Windows. The desktop wallpaper will be switched to a plain desktop (all of the customer’s desktop icons, gadgets, or pinned applications stay in place). Periodic reminders and a persistent desktop watermark act as further alerts to the customer.
It is important to know that the customer will see no reduced functionality in their copy of Windows – a customer’s applications work as expected, and access to personal information is unchanged. The Update will run periodic validations (initially every 90 days). During validation, Windows will download the latest ‘signatures’ that are used to identify new activation exploits – much like an anti-virus service. When tampering, disabling, or missing licensing files are discovered, the WAT Update runs a check and repair weekly to ensure that the licensing files are properly repaired.
http://windowsteamblog.com/blogs/genuinewindows/archive/2010/02/11/windows-activation-technologies-update-for-windows-7.aspx