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According to an article on BetaNews, 22 percent of installs checked through the Windows Genuine Advantage Program are showing up to be non-genuine. Here's the link: BetaNews
Does it matter if your copy of Windows is genuine? Yes, if you want the confidence of knowing that your software is legitimate and fully supported. And only genuine Windows customers can receive product downloads, Windows updates and special offers.
My home computer (the one im on now) is a genuine Windows XP BUT the one I use at work is a copied version of Windows XP with that dodgy 60second start up screen and annoying star in the bottom right corner...very irritating!