If you have no internet access or you do not want to activate over the internet, you chose to activate over the phone.
Then, it asks you where you are located.
You answer that question.
Then, it will give you a phone number to call.
I am in the States and the number that I get is toll-free. I don't know about anywhere else.
Edit:
When you call, you get to an automated system. it guides you through. You give it some numbers from your screen and it gives you some numbers that you type in. If you have the XP on more than one machine, it will fail and you will be connected to a live person. You will explain why this is the case and they will activate.
If it is an OEM license, you can only install it on one machine. Even if the machine dies, you are not officially allowed to install it on another.
You can activate it as many times as you want on the same machine.
Every time you format and re-install, you will have to activate.