The activation process is performed after the Full version of the product is installed, and before you can use it. Its purpose is to make sure that no one else uses the license you have purchased.
The activation process uses the Payment Code you have received in your purchase notification e-mail (or along with the product CD, if you have purchased a CD). It will also require you to type in the e-mail you have given when purchasing the product.
The activation is a one-time process; that is, after activating once, you will not be required to do so again unless you upgrade the product or uninstall and then install it again.
There are some system environment changes that require reactivation as well such as upgrading Windows.
Further details about the PDF2XL activation procedure can be found here.