Hi StolenChips,
I believe that appears to be the case. I see no other choices. And it needs to be a clean install (or a return to factory conditions) as a repair/upgrade install will leave you with the same problem.
One possibility is if you are in a foreign country or the computer came from a foreign country - then it's possible the local computer doesn't recognize the codes because it doesn't have them for all locations. To be certain, try finding a website for the appropriate country and see if they have a similar page and try the numbers there - or contact technical support or customer service and explain the problem and see if they can help you (after all, it's very unlikely that the numbers really aren't valid if you're certain you read them right - an l and a 1 can look very similar if printed really small - and I've needed to input the Vista activation code probably 5 or 6 times because I always got one wrong (even with my reading glasses - I eventually used a magnifying glass).
One other option is if you can find a genuine Vista Installation Disk of the same bit size to borrow (and I'd copy it while I had the chance), then you can install with that disk (all genuine disks contain all versions of the same bit-size and which one is installed is controlled by your product key which you presumably have) and there's no cost. Do not download a disk from the internet (regardless of how tempting it may be) as it is illegal and, perhaps more important, you don't know what you're getting (the person who put it there could have added or changed all sorts of files and codes so you could never trust your system and/or it would have problems from the start).
Good luck!