Note to self: When installing Vista from a volume-licensed media, Windows installs without prompting you for the REAL key, and uses a generic product key instead. When you subsequently forget this after entering 39 different product keys when rebuilding your laptop, when you decide to activate your Windows copy, you will get the following error:
This does NOT mean that you're having network/DNS issues, it means the Activation Wizard can't locate a Key Management Service (KMS) host on your network. It's looking for that, because, as the KB says, you are trying to activate with the generic product key.
Simple solution: Use the Change Product Key link from Control Panel\System and Maintenance\System to enter the REAL Volume License key that you presumably are the rightful owner/user of.