An easy way for Microsoft to link copies of their software to users. Each CD that they ship comes with a unique CD Key, and the installation process requires the user to input that key. The key is then used to generate a GUID that is used as that programs serial number.

As more and more games have multiplayer modes that require you to log on to a central server game-companies have come up with a clever new way to use CD-keys.

The keys of the different players on the servers are checked against each other and if the same key is found multiple times, the players who have identical keys are banned from the server. This is an effective way to stop people from using pirated versions, since all the people who have the pirated version more or less use the one same key.

Of course the companies probably do much more than just check for identical keys, eg. check if the keys are consistent with the keys they have given out with the game, check which keys are used most and so on.
Windows product keys can be defaulted during installation (meaning that the user doesn't have to rummage around for the manual/sticker while installing; they can just press enter) by creating a file named msbatch.inf in the setup directory, containing
Signature = "$CHICAGO$"

This will work for windows 9x, and presumably for any product that allows administrative install. This way you can backup your legitimately purchased product key at the same time as your legitimately purchased install media
Obviously, you'd want to use a real product key... The legendary 00000-000-0000000-00000 key doesn't work after OSR2.

The product key authentication in Quake 3's interface was quickly reverse-engineered to make key generators. Unfortunately id thought of this; The algorithm has a few billion valid keys, yet only the few hundres thousand keys id have shipped are authorised by the server (This would be why product-key checking is not optional). Your chances of generating a quake3 key that works on the internet are slightly lower than winning the lottery.

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