I ran into this problem after creating a customized windows 7 pro install image that included Office 2010 sp1. I installed all the updates for both Office and Windows 7 before running sysprep, these updates included sp2 for office. It seems there is a problem with updating to sp2 before activation, that leaves you unable to activate in the normal way. Luckily there is an easy work around. First attempt to activate normally, when this fails, close out what ever office application you had open. Next open an elevated command prompt. Navigate to the folder :C:\Program Files\Microsoft Office\Office14 if you are running 32 bit windows, if running 64 windows with 32 bit office go to C:\Program Files (x86)\Microsoft Office\Office14 Then simply enter: cscript ospp.vbs /act If everything works correctly you will see Product Activation Successful in the output of the script. There have been a couple times that I have gotten a failed activation using this method as well, but trying it again after a reboot has worked.