Activation involves sending info about your PC config and CD key to Microsoft. They will be able to tell that it is not the same PC and will most likely not authorize activation. To use a no-activation key, you must install with it. Once you've installed with a retail key, you will have to wipe and reinstall XP to use a no-activation key.

Of course, there may be hacks available for after install, but I don't know.
--WetWired