Windows won't register

I am working on a friend's laptop. He installed a copy of Windows XP Home Edition over Windows XP. Now it says "this copy of windows must be activated with microsoft before you can log on. Do you want to activate now: yes or no." When i click yes it says "windows is already activated click okay to exit." Then it goes onto the welcome screen and i click on user. Then it repeats the windows product activation screen again. Is it possible that both windows are still in there? I will add that if I say no to register the background picture comes on there are no icons.

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