I have had problems with MSReader - it won't let me open my secure books if I have my external US drive switched on. If it's switched off everything works okay.
You cannot access secure Lit books unless you have activated your MS reader program.
I suggest you disconnect or switch off all devices containing a hard disk, including a PCMCIA hard disk and any network or external USB drives, that are connected to your computer before you start.
Make sure you use your correct passport or Hotmail account details.
If you still have problems delete your browser cache. (temporary internet files and cookies).
If you still have problems uninstall MS Reader and then delete the MSReader folder (C:\Program Files\Micrososft Reader) reboot and start again.
If you still have problems, get a new passport account and start over again.
However, you won't have access to any books purchased with another passport account.
I don't know if it still applies, but it used to be the rule that you could not activate the reader more than twice. If you experienced problems after this you had to get a new passport account. I overcome this potential problem by using Acronis to make a disk image of my C drive (this also overcomes the problem of having to re-activate WindowsXP should the operating system become corrupted).
Good luck.