"The Windows 7 Home Premium product key you typed is invalid for activation."

You need to use the product key on the bottom of your laptop or inside the battery case. The key you used is the key that came pre-installed and will not work.

How to Change Windows 7 Product Key
http://www.windowsvalley.com/how-to-change-product-key-in-windows-7-and-windows-vista/

Also: http://www.blogsdna.com/2233/how-to-change-windows-7-product-key.htm

Step by Step:
Click on the Windows 7 Start Button
Go to All Programs/Accessories
Next right on Command Prompt and select “Run as Administrator” from the menu.
Now type following at the command prompt:  slmgr.vbs -ipk  XXXXX-XXXXX-XXXXX-XXXXX-XXXXX  (where XXXXX-XXXXX-... is your key)
Finally activate windows after changing the key, at the command prompt:  slmgr.vbs -ato

If activation still does not work try the following:

How to activate Windows 7 or Vista manually (activate by phone)
http://support.microsoft.com/kb/950929/en-us

1) Click Start, and in the Search box type:   slui.exe  4
2) Next press the 'ENTER' key
3) Select your 'Country' from the list.
4) Choose the 'Phone Activation' option.
5) Stay on the phone *** do not select/press any options *** and wait for a person to help you.
6) Explain your problem clearly to the support person.
7) The support person should give you a confirmation ID, copy it down on paper,
8) Verify the ID is correct by reading back to the support person.
9) Enter the ID number and click 'Next' to finish the activation process.

J W Stuart: http://www.pagestart.com

The Key found by a key finder program was the volume licence Key used by the PC maker.

The Key you require is the one on the label afixed to your Laptop

By using a generic win7 disk you would then have had to visit your laptop maker to install the laptop makers specific drivers, otherwise you may have functionality problems with your sys.

All in all the process would have been as long as simply spending an hour or less uninstalling any preinstalled software that was included in the makers recovery disks.

I have been encountering a number of these lately, a person with a laptop wants to reinstall Windows 7, something goes wrong, either their recovery partition is damaged or they don’t have any recovery disc. Thankfully, all machines that ship with Windows 7 come with a genuine proof of license, the COA sticker, located sometimes at the bottom of a laptop or in the battery compartment (if you are using a desktop computer you can look at the side or top. What this means is, you can reinstall Windows 7, using the corresponding edition Windows 7 retail disc and use the product key located on the COA sticker to reactivate it.

For example, if you bought a laptop that came with Windows 7 Home Premium OEM and you would like to reinstall Windows 7 but have not way of doing so, you can use a retail disc, whether it be a full or upgrade version Windows 7 Home Premium disc.

Once you have installed it, all you need to do is change the product key located on the Certificate of Authenticity (COA). Lets take a look at how to do that.

Click Start, right click Computer

Click Properties

Scroll down to Windows activation.

You will notice it displays a time until Activation but be completed. Also the Product ID indicates it is using a default key, this is only for the 30 day grace period allowed until you must activate Windows 7.

Click the link, Change product key

Enter the product key located on the COA sticker located at the bottom or (sometimes in the battery compartment of your laptop), you can also find it at the top or side if its a Desktop computer.  It looks something like the following:

Proceed to enter the product key and click Next

Wait while Windows attempts to activate.

If all goes well, within a minute, you should see this screen.

You can further confirm Windows 7 is activated by checking the Windows Activation status:

Notice Windows 7 now displays OEM within the Product ID to indicate the product channel it is licensed from. Please note, this also works with Windows Vista if you are still running that version.

If you are unable to activate Windows 7 using the Change product key method, you can try phone activation and speak with a call agent who will assist with reactivating Windows 7:

How to activate Windows 7 manually (activate by phone)
 
1) Click Start, and in the Search box type:   slui.exe  4
 
2) Next press the ‘ENTER’ key
 
3) Select your ‘Country’ from the list.
 
4) Choose the ‘Phone Activation’ option.
 
5) Stay on the phone (do not select/press any options) and wait for a person to help you with activation.
 
6) Explain your problem clearly to the support person.
 
http://support.microsoft.com/kb/950929/en-us

Resources:

COA Certificate of Authenticity:
http://www.microsoft.com/howtotell/content.aspx?pg=coa

What is the Windows Certificate of Authenticity?
http://windows.microsoft.com/en-US/windows7/What-is-the-Windows-Certificate-of-Authenticity

You're welcome

J W Stuart: http://www.pagestart.com

Hi,

I am having this exact same issue but unfortunately I am unable to obtain the code from underneath my laptop as the label is completely faded and code is unreadable, is it possible using the laptop serial number to recover this?

No. 

If you re-install using either a manufacturer's Factory Image Restore facility or a straightforward full installation from disk then the built-in Product Key in the BIOS [the "OEM SLP" that activated it when you first switched it on] might be able to self-activate without any action on your part but if it does not then the CoA sticker is your only remaining hope.  OEM SLPs do not always work the second time around and that's why you have another Product Key on the CoA label.

You can try taking lots of photos of the CoA sticker then playing around enlarging them, altering contrast & brightness settings to see if you can read it.

No.

You can waste your time asking if you want but they all seem to say that they do not keep records of Product Keys issued with each PC they make.

Have you tried a Factory Image Restore or doesn't your PC have such a partition?