What does the COA sticker on the customers computer say? Is it home or pro? Is the product key from the COA sticker the one you are trying to use?
Have you tried using phone activation? Maybe that will work.
How to activate Windows XP by phone
To contact a Microsoft customer service representative to activate Windows by phone, follow these steps:
Click Start, point to All Programs, point to Accessories, point to System Tools, and then click Activate Windows.
Or, click the Windows Activation icon in the notification area.
Click Yes, I want to telephone a customer service representative to active Windows now.
Click Read the Windows Product Activation Privacy Statement, click Back, and then click Next.
Follow the steps in the Activate Windows by phone dialog box, and then click Next.
Note The number appears now and differs based on the location that you select.
When activation is completed and you receive the following message, click OK.
You have successfully activated your copy of Windows.
Did you check with the customer to see if they have the XP install or recovery disc?