it would help if microsoft allowed browser upgrading without checking for a valid installation of windows. i don't know if things changed, as i'm on a mac now, but when i had XP, i was stuck with an older version of IE cause i bought a computer with an invalid copy of the OS
considering its about impossible to buy a pc without paying for a windows license bundled, I would be surprised if the percentage of illegal copies was larger that 0.X%
1) Computer repair shops very frequently format computers and re-install pirated copies of Windows. Considering the spyware problem of not too long ago, this is incredibly common.
2) Many parts of the world don't have stores like Best Buy and Dell might not ship there. Many computers are sold as brand new with a pirated copy of Windows.
3) In some nations, pirated Windows copies are sold by street vendors right next to pirated movies and video games. If you don't understand or respect intellectual property rights, you might as well upgrade from XP to Win 7 for next to nothing.
I was under the impression that they did drop that requirement.
(Also, FYI, if you do buy a computer and it came with an illegal copy of Windows, you should contact Microsoft to trade it in for a legit copy. It's usually free to do so provided you rat on the sketchy vendor)