This is one of the ideological reasons why I hate Windows: if you run Windows update to get security fixes, it makes you revalidate your Windows installation (it checks your serial number to see how many times it's been used, if it's pirated, etc), and it can lock your computer down to reduced functionality if it thinks there is a problem.
Once you initially purchase software, you should never ever need to go back and verify that you are legit. It's like all those lame warnings on DVD's or before movies telling you not to pirate, when you've clearly just paid for the DVD or movie.
So - the problem: the Windows validation servers are down right now, and may be down until Monday:

Nice. Innocently run software update, and bam! there it goes. Way to treat your paying customers.
(e:James)!! Stop using IE - it's a HIDEOUS browser! Use Opera or Firefox!
What drives me crazy about windows is that it assumes two things
1) You are an idiot and
2) What ever you are doing is not as important as what Windows has to tell you.
For example, auto-formating makes me want to scream. If I wanted to fucking indent that line I would. I spend more time correcting auto-corrections than I do making valid corrections. And I can't spell for shit!
Or, You are typing in something into a google search bar and then realize you only have typed in a single letter because a windows pop-up appeared reminding you that you can change settings on your windows pop-up blocker as if you didn't fucking already know that because it pops up every god damned time you open IE.... AHHHHH!!