Keeps asking me to activate, but then comes up that it is already activated!!!

You are prompted to activate Windows XP or Windows Server 2003 every time that you start the computer
http://support.microsoft.com/kb/312295

Preserving OEM Pre-Activation when Re-installing Windows XP
http://technet.microsoft.com/en-us/library/bb457078.aspx

To remove the message that you are already activated, you can force activation on reboot. If the wpa.dbl and wpa.bak become corrupted, they can cause a problem.
Reboot in "Safe Mode".
Rename the wpa.dbl and wpa.bak files located in the\Windows\system32 folder
Now the message should be removed and you can now reactivate.

Click Start, click Run, type:    regsvr32 regwizc
Press Ok

Repeat the same for the following:
regsvr32 licdll.dll

I, also, was having trouble with the activate before you log on after being activated already.

What I did was reinstall OS again and put another product key in and it worked perfectly.  I think I used the key so many times activating and then it did not want to accept it.

Hope this helps anyone having trouble like this.

After several different attempts to reinstall XP with a genuine holographed cd and genuine key - including things like completely wiping PC hard drive etc etc ad infinitum, this was my solution - do a search on the internet for "windows xp activation key" there will be plenty of results select two or three or four, depending on the age of the installation disk you have some pirated codes may have been included on the disk to be excluded if you get my drift. So install freshly xp use the pirated activation code for me this worked first time then when you come to do the final activation over the net or by phone (I chose phone cos you can change the software key back to your original paid for and owned and genuine xp code) get the necessary digits put them in and xp is ready to go. Thank Christ for that. 😬