The product key can only be used once. If this is the first PC you are installing and activating on, then the key is a duplicate. You have two choices, since it appears that the product key is already in the system, contact support or exchange the retail box at the store you purchased it from.
Note that there is a long discussion ongoing regarding invalid keys for retail product purchased recently at Walmart. It does not appear that this is your problem.
How to reach support (FAQ) - http://forums.microsoft.com/WindowsOneCare/ShowPost.aspx?PostID=2421771&SiteID=2
If you actually activated successfully once, verify this by signing in with the LiveID at http://billing.microsoft.com to view your subscription status. In that case, use the same LiveID to activate on a 2nd and 3rd PC.
-steve
