'You may be a victim of software counterfiting'

[o_O]

This happened earlier on my grandma's computer. It did an update then restarded and was working fine, then i turned it off and went to bed for the night. I got up this morning to find the damned 'This copy of windows is not genuine' crap. I know this copy of Windows is good because it came with the computer when my grandma bought it. Is there a way I can do away with this without reinstalling windows XP?

It could be one of three things:
1. The copy of XP that your grandma was sold was pirated.
2. The CD key that was used to register XP online has been blacklisted (pretty much means it's publicly available)
3. The copy of XP hasn't been registered online with a legit CD key.

You can be almost certain that it's the last one on that list.
It's probably quite likely that it's an OEM copy of Windows, so you may not have the CD key: you can go <a href="http://www.mydigitallife.info/2006/04/26/disable-and-remove-windows-genuine-advantage-notifications-nag-screen/">here</a> for a guide on removing the WGA check. I've done it myself, despite having a genuine version of Windows (not that I use it ), because I don't like the invasion of privacy, and as that guide puts it, placement of "nagware" on my system. It doesn't even work on legit copies, half the time:

[q="Wikipedia"]False Positives & Censorship

The WGA program does produce false positives (incorectly identifying a genuine copy of windows as "not genuine.") This can happen for any number of reasons. Microsoft has established a forum to help users encountering problems. Several users have reported that Microsoft has censored posts to this forum which question the ethics or legality of the WGA program, as well as users who continue to report that Microsoft has failed to resolve their problem. There is a Yahoo discussion group that encourages the free discussion of these topics[/q]

If you choose not to disable the check, and you have your CD key, and can't validate it legitimately, and you have the CD, which <b>must</b> have the little holographic sticker on it, you can mail it to Microsoft and they'll send you a new copy of XP.