Well, activation is what is required when you install XP, except in the case of Windows XP Corporate (ie Volume Licensing). You punch in your 25 digit key code and finish the install. Somewhere at the end XP prompts you to register and activate windows XP. If you are using the corporate version it won't ask you to activate, just prompt you to register, which you can bypass.
If you decline to activate you have 30 days to finish the process and then XP locks you out.