Hi Kiya,
I'm not a developer or a publisher (I used to work in developing copy protection systems) so I'm afraid I don't know the answer to your question. Perhaps one of the developers may be able to field that one.
As for the generated key, yes the users may require internet access but then for nearly all P.C (and Mac) based software it's almost a requirement to have internet access. All software that is developed today for the computer platform will have updates to fix bugs that have been found by the end user of the product.
Even if not, the computer could generate a code based on the motherboard and processor fitted (as does plenty of software today - even Windows XP!) and you could phone the help desk for a response code in order to use the product.
Since this key is specific to the computer being used, users of other computers could not use it as a new key would be generated on each computer. A method that (from reading other posts in this forum) Beyond Divinty uses if the copy protection method fails.
As for lending games to other users (not sure if copyright infringement is in place here) a new key is created from each machine depending on its configuration (i.e. not specifically embedded in the product) so it wouldn't matter who used the game (or maybe employ a simpler CD insert notification system?). It could also permit the company to keep a record of how many products have been sold.
