Basically you're allowed up to three activations within six months. If it sees a forth during that time, it runs it's authenticity check (some kind of points system based on what hardware components have been changed) and will lock itself out if it fails this check.
After six months the slate is wiped clean, assuming it passes the authenticity check and no further activations have been done.
Unless, of course, your key has been added to their 'high piracy risk' list, in which case you have to manually authenticate (call them) every time... luckily I don't have that problem.