At the moment I'm living outside of the United States. However, I ordered a copy of windows 7 for my new build from the US. The packaging says something about geographical restrictions, and I need to figure out if ill be able to activate from where i live.
You may not be able to activate from outside the united states. I live in England and I have had similar problems. You could activate it by going through a USA proxy. Even then when you do the updates WGA will flag the operating system as illegal, so do the updates through a proxy.
Once it is activated and you have done the first lot of updates you should have no further problems.
I'm sure MS support will be happy to help you with this. They aren't just sitting around plotting ways to make your life miserable, you know The activation people have a good bit of discretion for this reason.