What if you don't activate Windows 7? Which features won't be available to you?

"This depends on the Windows version so I've adjusted this answer for more versions than just Windows 7.

Windows Vista RTM has a reduced functionality mode where you'll only get access to a web browser to purchase a key (you can still explore the filesystem and launch most apps using the browser window). Time-limited to 1 hour. The 30 day grace period can be extended 3 times using rearm.

Windows Vista SP1 removed the browser limitation and let you use the entire desktop for 1 hour.

This mode was in Windows 7 as well but was apparently scrapped before final release. Preview releases enters this mode after the preview period expire.

Windows 7, 8.0 and 8.1 uses a desktop background watermark, a notification every hour and removal of your wallpaper. Optional Windows updates won't download and some settings are disabled. You'll still receive security updates and there's no actual time-limit anymore.

In Windows 10 personalization settings will be unavailable and a watermark will show on the desktop background. However, there aren't any popups every hour. Personalization settings can be changed using various other means, with some sources stating they will even sync using your Microsoft account."

"A Windows 7 installation in Reduced functional mode (notice the watermark at the right hand corner).
If you don’t activate your Windows software
- You will be prompted every time you log in to Activate.
- You will receive periodic prompts to activate your software.
- Certain visual experiences will be disabled such as the Windows Aero Glass theme.
- Won't be able to update software such as Microsoft Security Essentials.
Activate Windows 7 on this computer:
http://windows.microsoft.com/en-US/windows7/activate-windows-7-on-this-computer"