SQL:tabla dinámica y grupo al no funcionar

No puede GROUP BY activity, document, extraction dentro del PIVOT operador de tabla, el PIVOT El operador infiere las columnas agrupadas automáticamente. Pero puedes escribirlo de esta manera:

WITH Pivoted
AS
(
  SELECT *
  FROM table1
  PIVOT 
  ( 
    sum([Count]) FOR [Type] IN ( Document , 
                                Extraction)
  ) AS p
) 
SELECT 
  product,
  SUM(Users) AS TotalUsers,
  MAX(DAte) AS LatestDate,
  MAX(Document) AS Document,
  MAX(Extraction) AS Extraction
FROM Pivoted
GROUP BY Product;

Demostración de SQL Fiddle

Esto le dará:

| PRODUCT | TOTALUSERS |                   LATESTDATE | DOCUMENT | EXTRACTION |
-------------------------------------------------------------------------------
|   prodA |         60 | March, 02 2013 02:00:00+0000 |      113 |        152 |
|   prodB |         45 | March, 02 2013 02:00:00+0000 |       40 |         73 |

Actualización 1

WITH a
AS(
  SELECT    
    activity, 
    username, 
    [Last Accessed] = max(DATEADD(dd, 
                                  DATEDIFF(d, 0, ActDateTime), 
                                  0)), 
    --[#Users] = count(distinct username), 
    CASE 
      WHEN COUNT(activity) IS NOT NULL THEN 1 
      ELSE 0 
    END AS Count,
    CASE 
      WHEN pageURL LIKE '/Document%'
        OR pageURL LIKE '/Database%' THEN 'Document'
      ELSE 'Extraction' 
    END AS [Type] 
  from activitylog
  where pageURL not like '%home%' 
    AND pageURL not like '/Default%'
  group by activity, 
           username, 
           ...
), Pivoted
AS
(
  SELECT *
  FROM a
  PIVOT 
  ( 
    sum([Count]) FOR [Type] IN ( Document , 
                                 Extraction)
   ) AS p
) 
SELECT 
  product,
  SUM(Users) AS TotalUsers,
  MAX(DAte) AS LatestDate,
  MAX(Document) AS Document,
  MAX(Extraction) AS Extraction
FROM Pivoted
GROUP BY Product;