|"...the reason people reformat & reinstall Windows numerous times is because they encounter a problem that they don't know how to fix or are just too lazy to fix the "right" way - a virus for example."|
I certainly agree - that seems to often be the case.
"Do you lock up your disks and use BIOS passwords?"
Anyone who has access to your computer can use a third party program to find the Product Key Windows is presently using, if they can get into Windows.
Even if all users when you boot normally have passwords no one else knows, the built in Adminstrator user you can normally only access in Safe mode in 2000 and XP has no password by default
If your official Microsoft label is on the outside of the computer case as it's supposed to be, anyone who has access to your computer can copy the Product Key.
Or - if you have (or if anyone else has) posted a picture on the web of your computer that shows that label, if that's legible, anyone who can access that picture can copy that Product Key.
If that Product Key was posted on the web somewhere accessible to anyone, eventually Microsoft is going to find it and have it in their invalid Product Keys list.