This spyware is actually a hack tool used to get access to the windows xp cd-key. The program starts by dropping a file named findkey.exe. When executed this file starts reading the cd-key from the registry (HKLM\Software\Microsoft\Windows_NT\CurrentVersion\DigitalProductId) and appending it to the file xpkey.txt which is located in the same directory as the application. From there the key is read by the main program and displayed to the user.
The program presents possible risk because the applitcation that gets the registration code has no interface and can be used by other spyware programs to get access to private information.
There are many versions of this program, most of the working in the same way described abve.