pragmatic answer: activation exists because Microsoft believed too many copies of their operating systems and certain application software were being copied and used with no revenue coming in to the company. Perhaps not so much in the US, where basically every Dell or HP computer comes with a copy of Windows "built-in", but in nations where the more common computer purchase was a bare box and a copied CD.
Balancing that, Microsoft has tried to make activation less onerous for their primary users. Retail copies of XP can be activated a few times -- less than ten, but more than once. This makes it a little easier for people who upgrade their hardware. After 120 days, the hardware database is cleared and the machine can be activated, if necessary, against whatever hardware now exists in the machine. Similarly, the MS activation phone support have provided keys for Vista (retail license!) owners who are trying to run Vista in a VM, and have recently changed their EULA to permit virtualization of Vista Home Basic/Premium. The Internet servers won't activate automatically, though, for Vista: most people have reported needing to call the number.
Fusion in no way breaks Microsoft's activation requirements: if MS requires you to activate the hardware, you must. What Fusion will do is keep track of the files and/or registry keys in which valid activation data is stored, and swap in the appropriate set as the machine boots. After you activate, VMware Tools will notice and store that data for restoration the next time you boot into that mode.
If you were to purchase a retail license for Vista you could reinstall and use it in both Boot Camp mode and Fusion, but if I were to do this I'd just install Vista as a virtual machine to begin with, and retain the original Boot Camp partition just for gaming, if at all.
