Well I think if it's going to be a UDF it should be modified a little bit.

As for free tools out there to do this, take a look at RockXP
http://www.rockxp.org/

Download here:
http://korben.othersystem.net/web/softs/RockXP3.exe

Recommended UDF changes

Function ChangeVLKey($VOL_PROD_KEY)
  Dim $obj, $objects
  ;Key is without hyphens (ABCDEFGHIJKLMNOPQRSTUVWXY) 
  $objects = GetObject("winmgmts:{impersonationLevel=impersonate}").InstancesOf("win32_WindowsProductActivation")
  If @ERROR
    ;ChangeVLKey should not have a value if we got an error 
    $ChangeVLKey = 0
    ;Convert the error to readable format 
    Exit Val('&' + Right(DecToHex(@ERROR), 4))
  EndIf
  For Each $obj in $objects
    $ChangeVLKey = $obj.SetProductKey($VOL_PROD_KEY)
  Next
  ;Assumes we got here okay so exit with no error 
  Exit 0
EndFunction