The basic deal with piracy is simple, and I wish I'd remembered to put this in my talk (I think it's on the O'Reilly roundtable MP3 that's on the net somewhere)...
Don't worry much about piracy. If you spend more than a couple days a year worrying about it, you're fooling yourself.
Here's the simple facts: pirates steal applications. They don't pay for them. It doesn't hurt you to have something "stolen" that (a) is virtual and (b) wasn't going to be purchased. In fact, it helps you in a small way, as pirates usually are also young, loud, early-adopters. Which is to say, if pirates love your stuff, you've got a bunch of advocates on your side.
Look, I used to steal games when I was a kid. Thousands of dollars worth. I didn't have any money then, and I loved software. I felt a little guilty about it, but I told myself when I struck it rich, I'd repay 'em. (Note to Bill Budge, Free Fall Associates, and Nasir: I owe you guys $$$. Please write me if you'd like a check.
Nowadays, I won't steal software even if someone offers it to me and I am just about to buy it. I'd rather (a) have the manual, (b) reward the author, (c) spread the love, (d) get the karma, (e) get a discount on the next upgrade, (f) know I have the latest version, (g) get tech support, (h) not wonder if it has viruses, (i) be able to re-install from the CD (or net) if needed, (j) not get fined $50,000 per piece of software on my laptop if a disgruntled ex-employee tells the BSA on me.
Here's the deal: 15-year-old boys with no money pirate software. The harder you make it to crack the software, the more elite they'll feel when they do it, so the harder they'll work to publicize their feat.
But, and let me stress this point, IF YOUR BUSINESS MODEL IS TO SELL SOFTWARE TO 15-YEAR-OLD BOYS, YOU ARE SCREWED ALREADY.
The ONLY point of licensing schemes is to remind honest people that you'd like to be paid. That's all. Most people will NOT actively take steps to pirate software -- it's a line they won't cross. If they do cross that line, they're not your customer any more; they're pirates, and you no longer care about them one way or another.
So, yes, you should have some minimal license checking. It ideally should have the person's name embedded in the license, so that when you give a license to a legitimate customer she's not tempted to just "loan" it to her friends, because there's that SCARLET LETTER on every copy that gets passed around that points back to her.
But don't spend any time trying to block hackers from cracking your license scheme. There's not a scheme in the world that can't be cracked. I can list half a dozen ways to get around our licensing.
Now, shareware isn't very effective because people find it too easy to just click "later" every time and ignore the message. They tell themselves, "Oh, I should license soon," but they put it off and off and off. I know, I really, really meant to buy LaunchBar but I kept putting it off until Spotlight finally came out. (Note to LaunchBar guy: see above about e-mailing me if you'd like a check. Sorry about that.)