Update: THIS IS A HOAX!!!!! It was revealed early Tuesday that Microsoft has made NO changes to Vista's anti-piracy measures, thus rendering all my pontification below senseless and ridiculous. MS confirms my foolishness for being taken in as well as the no changes to Vista parts.
Vista's "reduced functionality mode" is now live for everyone. I sure hope MS can manage this correctly. The recent WGA outage does not give me hope. If they can, they will make a lot more money. If they can't manage it well, they will lose an incredible amount of customer loyalty (or tolerance, as the case may be).
The issue will be false positives. If they can avoid them in the largest part, they will have done well and the authentication system will be at least tolerated. A fair number of accusatory messages sent to legitimate owners will bring everything from approbation to lawsuits. It is all down to how well it works.
Make no mistake about it; this is one of the largest corporate gambles in a long time.