I was trying to activate Windows 7 on my desktop after I installed 7 and all of the required updates when I received this error:

DNS name does not exist.
0x8007232B

Yay! Turns out that I forgot to put the key in after I installed. Or, if I remember correctly, if you used vlite to auto input the key you will have to change the key to the same one and then reactivate.

So after changing the key, typing it in again, and then clicking activate, everything went smoothly.

BTW – Windows 7 is much faster than Vista SP2.