A sysadmin kicked off the thread:
Woke up this morning to find a few thousand Windows 7 VDI machines reporting that Windows 7 wasn't genuine. After much
Removing the update, deleting the KMS cache and activation data from the PC's and re-activating against KMS resolved the issue.
ZDNet has a nice write-up on the Microsoft patching problem and the issues it has caused:
This time they've found that its January security updates are bricking Windows 7 devices with an errant 'Not Genuine' Windows license error, and a bug that blocks administrator access to remote shares on Windows Server 2008 R2 and Windows 7.
Microsoft told ZDNet, "We are aware of this incident and are presently investigating it. We will provide an update when available."