I've been following this story for more than a decade so I wasn't really surprised to find this from veteran Microsoft-watcher and Windows Secrets author Brian Livingston...

Windows Genuine Advantage — the controversial program Microsoft auto-installed as a "critical security update" on many PCs starting on Apr. 25 — not only causes problems for many users but has now been proven to send personally identifiable information back to Redmond every 24 hours... This behavior clearly fits any plausible definition of "spyware." ...I have no hesitation in calling the program a security nightmare that Microsoft should never have distributed in its present form. [more]

That was posted a couple of weeks ago. Since then Microsoft have back-pedalled (a little) and WGA doesn't phone home quiet so often...

The change of tone from Microsoft about WGA doesn't mean you can let your guard down. In a June 8 statement, the company said WGA would be changed to call home every 14 days instead of every 24 hours. A subsequent June 27 press release is unclear on this point but emphasizes that the new WGA will still operate, just not as frequently: "It is important to note that WGA Validation still periodically checks to determine whether the version of Windows is genuine." [more]

My only surprise is that anyone's surprised. Who remembers the Windows 95 Registration Wizard debacle or the way Media Player relays your DVD selections back to Borg HQ? What about when they claimed ownership of every single item that passed through their Passport servers or the way they re-wrote and/or re-examined all their code "for security vulnerabilities" but somehow overlooked the WMF backdoor?

Time and again Microsoft have proved themselves to be a company without a memory - or ethics.

Livingston's second column details the steps you can take to dump Windows update, while here's my own solution. (It's penguin-shaped.)