Inside Windows-Update

Then, what do the remaining 68 bytes contain? The last 48 bytes of the PID attribute contain the product ID of the Windows XP installation as a null-terminated Unicode string. Product IDs look like this.

12345-123-1234567-12345

The product ID of Windows XP is accessible in the "Properties" of "My Computer". The ten digits making up the second and third group of digits is extracted from the product key that is entered during the installation of Windows XP. Product keys look like this.

ABCDE-ABCDE-ABCDE-ABCDE-ABCDE

The value represented by the mentioned ten digits is combined with a digital signature. The resulting combination is encoded using 25 letters and digits, which directly leads to the product key. Digital signatures are based on public key cryptography. Microsoft generates the digital signatures using its secret key and Windows XP verifies the signature using the matching public key. If the signature is valid, the product key is genuine. If the algorithm and the parameters of the algorithm are carefully chosen, nobody but Microsoft can generate product keys that contain a valid signature. The threat posed by key generators that are written by software pirates to generate counterfeit product keys is reliably countered because the necessary secret key is only known to Microsoft.

The mentioned ten digits unambiguously identify the product key from which they have been derived. The reason why the PID attribute contains the product ID therefore probably is that it enables the Microsoft server to deny updates to product IDs that match product keys that are spread via the Internet by software pirates.