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Service Pack 1 Will Turn Off Vista's 'Kill Switch' | Compiler from Wired.com:
Non-genuine copies of Vista with SP1 will display a start-up warning that the system is not activated with links to “activate now” or “activate later.” Non-validated copies of Vista SP1 will also change the desktop background to black and a prominent notification will show up in the lower right hand corner letting you know your copy of Vista is not genuine.

Interestingly enough, part of the warning that Vista will issue to those without a valid license key includes a link to purchase the software at a reduced rate. For instance, using the “get legal” method users can pick up a copy of Windows Vista Ultimate for $200, compared to the retail version which sells for $400. Presumably these are OEM licenses, but it still seems odd that you can pick a legitimate copy of Vista cheaper by starting with a pirated copy.

Microsoft’s decision to do away with the kill switch most likely stems from the number of problems the system has had in the last year, including several instances where genuine copies were mistaken labeled as pirated software owing to a server error. That incident, which was caused by human error, affected almost 12,000 users and highlighted some of the flaws in current system.

Perhaps the strangest part is that, in spite of the fact the Microsoft is doing away with the kill switch, Sievert claims that it’s been a huge success — Vista piracy is roughly half that of XP.
It is worth noting that correspondence does not imply causation. It's highly likely that Vista piracy is down because anybody who knows enough about computers to install an OS off a P2P'd ROM wants anything to do with Vista.
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