Threat Level's Ryan Singel puts together a great overview of "BD+," the as-yet-undefeated DRM system that is included as an optional secondary restriction layer on Blu-ray high-definition discs.
The BD+ system, invented by the San Francisco-based company Cryptography Research, embeds a virtual machine in Blu-ray discs that play only on authorized Blu-ray players.
When the player spins up the disc, the virtual machine software and the DVD player view each other with mutual suspicion, but initiate a complicated mating ritual involving checks of cryptographic keys.
Once the disc decides the player is legitimate and hasn't been compromised, it allows the movie it contains to be decrypted for playback.
But if the disc detects that the player has been modified to record the movie, or it is using stolen keys from a different player, the disc won't play. Unlike AACS, however, BD+ has no ability to disable a player permanently, nor does its software linger after a disc is ejected.
I don't think I have to tell you my opinion about ultimately fruitless customer frustration schemes, but it is always interesting to see the current state of the art of DRM design.
How Crypto Won the DVD War [Threat Level]