Doc Searls, Eric Norlin and Bryan Field-Elliot have smart things to say about digital rights management. Check out their commnets.
The only thing I would add is that Hollywood, Washington and Microsoft are forgetting one very important component of the equation, the general public. Laws work because the majority of a society thinks they are valid. (i.e. Everyone agrees killing another person is wrong and should be prevented, therefore there is a law.) Laws that the majority of the populace do not agree with end up either being ignored or having very bad side effects. A perfect example is prohibition in the 1920s to 1933. A very large proportion of the population ignored the alcohol ban (Heck my wife's grandfather brewed his own beer and he worked as a police officer!) and it allowed the rise of organized crime.
If these types of laws every get passed, they will only result in the development of a black market in PCs without the technology. The consumer will also bed really ticked off at the companies who dropped this on them and they will not forget. I will personally not buy a computer that has this type of technology and I bet many people feel the same. Trying to put DRM technology in new PCs could start a sales slump that would make the last few years look like a picnic.
As far as Microsoft goes, if they go with the content providers they are dead. Content providers don't write software and all innovation has started with small software developers. Everyone will gravitate to a new platform (Linux?) and they will loose their monopoly. Honestly, I doubt any of this stuff is going make it out of the House or Senate: There is enough push back to stop it.
12:31:12 PM 
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