• WHY SHOULD I INSTALL WINDOWS GENUINE ADVANTAGE?

Microsoft says that you should because:

NOTICE: THIS UPDATE FROM MICROSOFT WILL HELP YOU KNOW IF YOU ARE RUNNING A PROPERLY LICENSED, GENUINE COPY OF WINDOWS XP. SOME UPDATES AND OFFERS FROM MICROSOFT REQUIRE A GENUINE COPY OF WINDOWS XP.

• WHAT'S IN IT FOR ME AS THE USER?

If your software is licensed you will not get a notice that your software is unlicensed.

If your software is unlicensed you will get a notice that your software is unlicensed

If you have a question about whether your software is licensed you can find out by installing the update.

If you don't want that question answered or don't care. As far as I can see there's not much in it for you.

• WHAT'S IN IT FOR MICROSOFT?
  

Microsoft gets to probe your computer for information:

• Computer make and model
• Version information for the operating system and software using Genuine Advantage
• Region and language settings
• A unique number assigned to your computer by the tools (Globally Unique Identifier or GUID)
• Product Key (hashed) and Product ID
• BIOS name, revision number, and revision date
• Hard drive volume serial number (hashed)

If this product determines that you have an invalid license or your system has activation exploits additional information may be sent to Microsoft to better understand why your system failed to validate. Also information about who sold the software may be sent to Microsoft etc.

• DISCUSSION

So you have to wonder why you would voluntarily put the software on your computer. There doesn't seem to be much in it for the consumer, and there does seem to be a lot in it for Microsoft.