First, make sure you're using the latest TurboActivate (get it here). We recently fixed a false-positive bug where certain old and/or poorly designed CPUs reported that they were a VM even if they weren't. We've fixed this.
If the customer is running a version of your app that uses the latest TurboActivate, then yes, that means the user is trying to run on a virtual machine and you've chosen to disallow activations on virtual machines.