I guess this is a rare issue – and considering that we’re approaching Windows 8 will make it even rarer. However, this is so absurd that I’m dedicating a blog entry.
The symptoms are quite simple: I was trying to activate a (legally bought) copy of Windows XP Professional with SP3. But whenever I tried to access the activation window in order to activate within the first 30 days, nothing really happened.

The setup wasn’t a freshly installed Windows – I updated to XP Pro (w/ SP3) on a system that has been running Windows Home with SP2 for 6 years. This means, not only was it an update from a Home to a Professional version, but the update had to deal with a system that has been targeted with a myriad of programm installations and deinstallations. Even though regular defragmentation and system cleaning has been performed, such usage leaves its tracks.
Naturally the new installation of Windows will have to be re-activated. A little icon in the systray will keep reminding you ;). However, clicking the icon in the system will – apart from a small flash of the sandclock – remain without effect (but remove the icon). Trying to start the activation program from the start menu (Start, All Programs, Accessories, System Tools, Activate Windows) follows the same pattern, just as well as putting oobe/msoobe /a on the command line.
At the time of the very original installation I also was using XP-AntiSpy, a small tool that centralizes ways of deactivating annoying functions of XP (deinstall MSN Messenger, stop bugging for activation, disable some phoning home functions). Some options of that tool would cause Windows Update (and also activation) to stop working, so I tried to play around with the settings – without success, no activation program opening.

Taking the fact that the activation program wouldn’t come up meant that I didn’t even get the chance to choose from the options to activate via internet or telephone (or modem).
I could have gone with the (rather fairly documented) “solution” of resetting the activation period for another 30 days by calling rundll32.exe syssetup,SetupOobeBnk. But this would have been just a temporary solution, since the computer will need to stay in service for a while and resetting is only possible up to 4 times.
There are a few tips out there suggesting certain tweaks in the registry (mainly about OOBETimer, WPAEvents and the likes). Such tweaks are quite dangerous in this context and should not be tried. People report being stuck in a loop and screwed, forcing them to perform a complete re-installation.

However, after a while I stumbled across this forum entry with the same problem: the machine ticking for a second, but doesn’t start the activation window.
The guy stated he found out that something must have gone wrong with the update of the Internet Explorer. He removed tracks of IE7 and IE8 and reinstalled IE8. This helped, for him and for me.

I did not have any tracks of IE7, however the installation of IE8 must have been faulty. So I followed the steps in the Microsoft Support base to remove IE8 as well as the steps from Microsoft TechNet to reinstall Internet Explorer 8.
After the installation was done, I could fire up the activation program and activate Windows XP as usual.

Bottom line: many things can break the Windows activation, in this case it was a faulty update of the Internet Explorer. Hope this helps 🙂