EFG: Yeah, I had an idea that's what you were talking about. I have a friend in Bangalore who told me that near where he lives there's a shop where you can go in, tell the owner how much you have to pay for a computer, and then he picks out a bunch of parts while you're standing there, grabs a Windows CD, installs the OS, then you pay him, then he makes a copy of the OS CD for you, then you take your computer and go home. This friend of mine has LSB or something like that on his machine, but his first computer was from this very shop.
I think there are number of reasons why this is so rampant, but I think one reason that Microsoft doesn't fight it harder than they do is that they're playing out the early stage in a long-term strategy. Once the residents of that part of the world have more money (which is already happening), they won't think twice about going into CompIndia or whatever and paying full price for a machine with a legit copy of Windows on it, just like people in the wealthier nations already do.