If your Windows installation is not genuine you need to purchase a valid license.
If the version of Windows that is currently on the computer (I.E. Windows XP Home) came from the computer manufacturer with XP installed on it, it may be valid even though you get the non-genuine message.
Do you know the 25 digit key number for your Windows installation?
I would suggest that you contact the manufacturer of the computer.
By not having SP2 and subsequent Windows Updates installed you have left your computer susceptable to malware infections too numerous to list. It is subject to virus, trojan and worm infections that would make it a hazard to other computers on the internet, especially any in your email address book, as well as opening any personal data such as banking records, etc, to the many miscreants looking to take advantage of the weak security you have allowed your computer to have.
A Certificate of Authenticity (COA) is a label that helps you identify genuine Microsoft softwarehttp://www.microsoft.com/resources/howtotell/en/coa.mspx
How to tell if MS Software is genuinehttp://www.microsoft.com/resources/howtotell/en/faq.mspx
What to do if you have been sold counterfeit Windows XP softwarehttp://www.microsoft.com/genuine/downloads...?displaylang=en