As hinted by Peace Phoenix, the activation server simply generates a code based on your serial key, email address, and hardware config (AFAIK SD does not keep or use your hardware info, it is merely used to bind that activation to that machine). It then stores that code in a file called sig.bin, located in the GalCiv2 folder. No risky disk muckery involved at all.
If you install the game via direct download with StarDock Central, the activation is done automatically during install and you never even notice it. If you install from the retail disc, there is no activation (the serial is not even required), but if you then later install a patch you will need to activate the game. In that case it is a simple matter of providing your email address and serial key in a prompt when you run the game the first time after patching. If you're online at the time, it'll grab a sig.bin file from the server and merrily continue, and if not, it'll give you a code you can email in from a computer that is connected in exchange for the sig.bin file you need (some sneakernet transfers may be required!).
As noted above, there is no practical limit to how many computers you can put it on, though obviously if they get activation requests on 100 machines for the same serial, they will start to ask questions
Do note that the sig.bin file generated after you activate is local to that computer only. So if you back it up in SDC and install the game on another machine via that backup, you will need to delete the sig.bin file there and reactivate so it works on that machine.
-DK (official forum moderator)
