The story is a little unclear. If it's the issued HP OS then reinstalling might fix it. However with the end of XP looming you must cure this fast.
Other causes are those rather horrible but well meaning techs that installed some "Blue" version of XP. Called by many names such as Blue, Technician's version, Black and such these do fail like this and can cost the owner far more later.
Bob
Hp Pavilion 533W
Win XP Home
All of a sudden when I log on a window pops up and says" Microsoft requires the operating system needs to be Activated" Yes - No
Does not make any difference which I choose a screen pops us and says this copy has already been activated.
Any suggestions on what to do besides re installing?

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic