wgatray.exe runs in the background to validate your Genuine Windows XP software against a list of serial numbers that are blacklisted by Microsoft.
If your system is running pirated XP, the wgatray process will show a pop-up warning - "This copy of Windows XP is not genuine" - this is no error or virus, its a reminder from Microsoft to go original.
Though you can temporarily disable Windows Genuine Advantage notifications by removing wgatray.exe or wgalogon, this is never recommended since you will not be able to download important security updates and patches from Microsoft Updates website.
If you are running a counterfeit or illegal version of Windows XP, rather than hunting for a wga workaround, just get the authentic GGK kit from Microsoft to convert your pirated XP into Genuine software by changing the XP product key - completely legit way to make Windows genuine and you need not reinstall your Windows XP.
The WGA patch is installed if the user has opted to automatically update Windows via the Windows Update Website or if a XP users manually downloads the latest Windows updates.