If you get this error while attempting to activate Windows…
…then re-enter your product key. That’s it.
You’re most likely using an enterprise copy of Windows Vista or Windows 7 (or Windows Server 2008 or R2) that’s set to activate using a KMS key, instead of a MAK key. A KMS key requires a license server on the network to activate against, which if you’re at home or in a smaller business one probably doesn’t exist. Re-entering the product key forces Windows to activate against the Microsoft server(s).