Welcome to our forums.
First of all I think it's a bit harsh to condemn the software over an activation issue. We here at www.totalpda.co.uk setup TomTom for a lot of our customers and besides their site being down for a few hours about 2 weeks ago we have never experienced any issues when activating a customers copy.
When you are performing the install and it asks you to go online to register this feature relies upon you have a active internet connection (either broadband or dialup) and will prompt you again if it can't access the web. What you can do is leave the code section blank and continue with the installation. You can then log onto
www.ttcode.com after installation and complete your activation.
TomTom do not go to bed when we get up, they are 1 hour ahead of us as they are based in Europe and also they do have a support number which is 0845 161 0009.
It's good that you retailer is willing to take the software back from you and maybe you'll find some success with another navigation product.