How to fix : An activation code is required before we can finish setting up your phone.

Unlike most people I keep running in to trouble with Windows Phone 7 ( nothing major just some small stuff here n there ) . I am not sure if many people will come across this but when I was setting up my Windows Phone 7 for the first time I ran in to an issue with Windows Live ID. It gave me an error message telling me the activation failed and they don’t want to bother me with the trouble then it came up with an activation code screen with the message

An activation code is required before we can finish setting up your phone. Please contact customer service. You can skip this step and do it later.
Call Support

If you click on call support it will bring up the dialer and then nothing .. ( I am not sure if thais makes a difference in the US, down here in Oz the link does not dial support team. So I jumped on to Bing Google to search for the issue. I found this knowledge base article ( click )

The WHY according to Microsoft :

In Windows Phone 7, during your first Windows Live ID sign in, a background validation is performed prior to completing the sign-in process and connecting to Windows Phone 7 services such as Xbox LIVE, Marketplace, and Hotmail. In rare cases where this validation fails, you may be prompted to enter an activation code before Windows Live ID sign in can be successfully completed.

To receive a Windows Phone 7 activation code, you will need to contact Microsoft Customer Service. If you are in the U.S. you can call 1-800-MICROSOFT.
For rest of the world get you local contact number : www.microsoft.com/worldwide
If you are in Australia you can call : 13 20 58

You will have to talk to 2 different department ( took about 20 minutes in total for me , YMMV ). Basically they take your Live ID and generate the activation code for you which is in the format xxxx-xxxx-xxxx-xxxx-xxxx , put that in and all is well. So if any of you run in to this bloody thing , you know what to do and wouldn’t have to pull your hair out like me.