Microsoft Genuine Advantage is a critical update that is downloaded from Microsoft that checks to see if the products you have installed from Microsoft are genuine and not pirated.
It functions by running a process in system memory that scans the operating system, then sends a report back to Microsoft via the Internet as to the status of the software.
If the software is genuine, nothing happens, This copy of Windows is not genuine and you have not resolved this issue. This computer is no longer eligible to receive select security upgrades from Microsoft. To protect your copy of Windows, you must click Get Genuine now.
The update is not absolutely essential and some firewall software can nullify it's effectiveness. It has also been criticizied by many users as impotent to actually solve the problems of piracy, an annoyance on legitmate users, and it has raised legal concerns since it covertly sends data to Microsoft without user consent, much like spyware, which Microsoft has admitted.