This error can be given when the license file for previous version does not get removed.
Please search for this license file and remove it. (SolidWorksStandaloneLic.Lic)
The default location for license file on vista system is c:\ProgramData\SolidWorks\.
And on XP system is C:\Documents and Settings\All Users\Application Data\SolidWorks\
However if you do not find the file at this location, Please perform Advance search and enable option for including non-indexed, hidden and system files.
After that try doing the activation.