I played it for a bit last night.
The version was 1.2 which is the most current version.
I know that if you had the DVD version, the patch was supposed to remove the activation limit or requirement. From what I had read, this didn't apply to digital downloads. The wiki doesn't make the distinction but I'm not going to put faith into the wiki.
When I installed it, there was a prompt specific to TAGES. I also checked and there is information stored in the directory: C:\Documents and Settings\All Users\Application Data\Tages. However I imagine if you installed from the DVD that TAGES would still be there. I think the patch just removes the activation requirement from the game itself.
From what else I read, it doesn't sound like it's going to be a big deal to get more activations. Yes, there may be an inconvenience as you might have to wait. It doesn't sound like it's too picky - changing video cards doesn't count, it's the motherboard and one or two other elements. So if you're going to only use it on 1 or 2 PCs, probably not a problem. If you have 4, then yeah, it's going to be a problem.
I understand that people will refuse to buy the game out of a matter of principle. I respect that. I think seeing the fact that they removed it (at least for the DVD) in the later patch is good enough for me that they got the message. Although it could be that enough time had passed from the games release that TAGES had served it's purpose. I don't know and honestly I don't care.
From the little bit of time I spent with the game, so far it looks really good. Definitely worth the sale price! Seriously, I think this is something that I can definitely get into and play for a long time. Until something new and shiny my way comes, lol.