Just a thought:
The XP MCE install media that is currently being used may be tagged (via PID) for a different license; i.e. OEM, VLK, Retail etc. The type of Windows install will dictate the activation key that will be accepted. If one were studious and had the "I wanna do it!" attitude, this hurtle can be cleared in as little as five minutes.
If original XP MCE media is being used, the COA key should be accepted regardless of Service Pack.
Edit: I, too, have activated many installs by phone. I have never had the opportunity to purchase support from an actual MS employee: Windows either activates or it does not.
Edited by bludgard, 04 February 2012 - 08:04 AM.