So did MS decide that since the copyright protection would be cracked so quickly anyway, to just give in and go back to 'No Disc Required' like in FS2002? 

I hate activation but I will be creating image discs after I install FSX that way I never have to activate it again , just restore it and go fly.

Just don't like it ... I tend to reinstall Windows XP quite a lot ( always changing motherboards and things), I activated mine so many times that it exceded the number of times it can be done over the internet, I had to do it over the phone. I got tired of that mess and after installing a fresh copy I just create an image just so I can restore it in a matter of minutes which was what I did right after reinstalling it today. If everything goes as planned, I will do the same when I buy FSX and if anything goes wrong I can just restore the OS and games and be ready. It takes me from 1-3 hours reinstalling Windows XP and all the programs from all the retail CDs; however, it takes about 30 minutes at the most to restore the image I created and it is already activated too! so it works for me.