http://support.microsoft.com/kb/930379
If you ever try to login to Windows Vista and you get a license installation error (and it tells you that your copy of Windows is not genuine), but you know that it is incorrect, it is possible that you have set the Software Licensing service (Slsvc.exe) to Manual or have set it to disabled.
An error occurred during the license installation
Error Code: 0x80070426
Error Information:
The service has not been started.
For assistance please try one of the following support contacts:
http://merchantsupporturl
mailto:merchantsupport@merchant.com
The help on here says that this may occur during an anytime upgrade process. I have submitted that it also happens if you set the Software Licensing service set to manual and reboot the computer. I also submitted a more complete workaround.
You would follow their workaround, except you need to reboot the computer into Safe Mode and set the Software Licensing Service to Automatic. To reboot the computer in Safe Mode, you just restart the computer and hit F8 repeatedly until you are presented with the boot options screen. Then you select Safe Mode and log in as normal. Open services by pressing Right Clicking on the [Computer] icon and selecting [Manage]. Select to [Continue]. Expand the [+] next to [Services and Applications] and select [Services]. Find [Software Licensing] , Right Click and select [Properties]. Set the [Startup type:] to Automatic. Click [Apply], then [OK]. Close out the window and reboot the computer. Login as normal.