It has never been too hard for someone with the right amount of time, desperation, or flexible scruples to get around Windows XP's activation scheme. And yet XP activation, the actual encrypted algorithm, loathed since before it started, has never been truly broken, at least entirely offline. Now, far past the logical end of all things XP, the solution exists, floating around the web's forum-based backchannels for months now.
On the blog of tinyapps.org (first spotted by The Register), which provides micro-scale, minimalist utilities for constrained Windows installations, a blog post appropriately titled "Windows XP Activation: GAME OVER" runs down the semi-recent history of folks looking to activate Windows XP more than 20 years after it debuted, nine years after its end of life, and, crucially, some years after Microsoft turned off its online activation servers (or maybe they just swapped certificates).
xp_activate32.exe, a 18,432-byte program (hash listed on tinyapps' blog post), takes the code generated by Windows XP's phone activation option and processes it into a proper activation key (Confirmation ID), entirely offline. It's persistent across system wipes and re-installs. It is, seemingly, the same key Microsoft would provide for your computer.