If you want to find out what triggers activation, do a search on google. Plenty of sites have information on it.
If you make core changes to hardware (motherboard, CPU etc...) it will ask you to reactivate. A painless prccess that takes 2-3 minutes. You have 30 days to activate too, it's not like they shut down your PC immediately if you don't activate. If you do call in instead of doing it online, the reps don't drill you, just ask for your current key which pops up when you double click on the activation icon, they input it and give you a new activation key, which you have to enter.
No MS doesn't monitor everything you do and there are ways to turn off the few things that they actually follow (like error reporting, remote assistance, windows update and a few other things etc...)
OS is perfectly safe. If you have a pirated copy, get a life and pay for what you're using. There are NO phone charges associated with activation (at least in the US and UK where I've had to activate). Otherwise you just activate over the net.
Longhorn is coming out in mid-2004 so there is no alternative unless you want a Mac or want to go the Linux/Unix route.
If you're really worried, just get win2k pro with service pack 3. Stable, fast, less of a resource hog, not by a huge amount mind you. The two OS are more similar that MS would like you to know. XP has some eye candy and a couple other goodies
XP is a great OS, stable etc... worth the money. Never had a problem with it.
FYI you don't necessarily need to change the OS to be able to burn DVDs. There is no native DVD burning support in the OS, that's handled by a burning program that generally comes with the drive.
All this stuff came out 18-24 months ago when the OS was released, plenty of articles on it, I suggest you read them instead of listening to folks that spend too much time watching the Xfiles.
P4 2.6C, Thermalright SP94/Panaflo 92MM M1A, IC7 Max3, Swifty MCX159, 1GB Geil PC4000 Ultra Plat, Radeon 8500, Audigy 2, 2X WD Raptor RAID 0, WD 250GB SE, Plex 708A, 166SDVD, LianLi PC75, XP Pro.