KB: When signing in to your Windows Phone with Live ID you are asked for an activation code.

Microsoft has published what probably is the first KB article for Windows Phone 7 after some users have reported that they cannot activate their shining new phone via Windows Live. While this issue does not affect the use of the phone itself, the user just won't be able to access services like Live email, Xbox, MarketPlace etc.

The good thing is that Microsoft has promptly issued a fix that requires you call Microsoft Support to get the activation code that will let you proceed with setting up your phone. Read the KB article for more information and to locate the Microsoft Customer Service nearest to you.

KB2431699