Very good piece in one of the Citrix VDI in a box best practice articles at http://support.citrix.com/article/CTX134349.

VDI-in-a-Box 5.1 offers a new setting at the template level to reset the activation timer. Leaving this unchecked implies that the image’s activation clock is not rearmed during prepare. Checking the box implies that the image’s activation clock is rearmed during prepare, decrementing the activation count. If the image’s activation clock is rearmed more than 3 times before the image is activated by KMS (Microsoft activation Key Management Service), the image cannot be prepared because the /generalize will fail.

 

According to Microsoft: “Resetting the activation timer prevents the image’s grace period from expiring before the image is deployed. Running Sysprep.exe does not remove the installed product key, and administrators are not prompted for a new key during mini-setup… When building demo virtual machines (VMs) for internal use (e.g., building VMs for the organization’s sales department or to set up a temporary training environment), running the Slmgr.vbs script with the /rearm command-line option extends the grace period another 30 days, which in turn resets the activation timer but makes no other changes to the computer. The activation timer can be reset three times for computers running Windows 7 or Windows Server 2008 R2.”