There are only two reasons why you wouldn't have to activate Windows XP.
1.)If you purchase a new computer with Windows XP pre-installed, it will most likely come pre-activated.
2.) The version of Windows XP Professional sold with a large corporate site-license doesn't contain the activation code. If you're using that version, you'll never have to activate it.
If it is a burned copy of Windows it is illegit. Unless, he has some policy with Microsoft that wil allow him to use his copy of Windows XP on more than one computer, which I doubt. The whole reason for activation is to prevent a single copy of Windows XP from beings installed on more than one computer.