OK.. here is how CD Keys work with in the game..
the game EXE contains an algorithym that will verify if a CD key is valid to unlock the SFC title.
also this registry key is entered into your system registry.. as such, it is called upon when trying to log on to the Dynaverse.
now since SFC has a Single Player campaign mode, it has it's own version of the server kit built in.. when a person connects to the dynaverse, this Mini kit is launched, thus displaying a map to the player.. but also, as soon as you connect to the directory server where you can see all the servers online, SFC has already validated your CD key (to make sure that it is unlocked) plus this key it ghosted into the mini Server kit enabled by the game EXE.. now since the CD Key has been enabled 2 times, the directroy server will hold that CD key resident until such time as the person logs off.. this means that only 1 person can use a specific CD key while on the Dynaverse server... now as far a a person logging into a server, I do not think that the server will retain a CD key footpring, otherwise that would be a way to ban people off of servers instead of having to ban email addresses...
soo, what this means is that is 2 people are sharing the same CD Key, only 1 person can play online at a time since the CD key will ghost the directory server (and GSA client validation server).. so the person playing online will be fine, but the other person with a copy of the CD Key will be blocked from launching a multiplayer game until the first person logs off...
as such, it is not a good idea to share CD keys.
now when Interplay controlled the Validation servers, the CD Key would footprint and prevent 2 identical CD keys from being used online period, no matter if someone was logged in or not.. but when Taldren took over the Directory servers, that feature was lost.
hope that this clears some things up.