I hit the activation limit on my family pack (3 copies) and was never given any instructions on what to do. My system would go black and eventually become unusable. Instead of telling me how to reactivate the copies I bought, Microsoft puts up a message on how to purchase another new copy of Windows.
I'm done with this company now. I bought a Mac, and I'm not coming back.
FWIW, I hit the activation limit in WinXP, and the activation dialog had a phone number and some numbers I had to read to the person on the line. A few minutes later everything was fine.
(I'm a MS employee but I was doing this at home with my "I'm a customer" hat on)
The Windows 7 genuine advantage warnings are hostile, they accuse the user of stealing the software and as I remember the prompt was only to go ahead and pay for another new license of Windows 7.
In any case, it's not a problem for me anymore, as I now only run a pirated copy of Windows 7 in a virtual machine on my Macbook for testing on.
I'm done with this company now. I bought a Mac, and I'm not coming back.