The iPod and DRM
Search for digital rights management (DRM) on Google, and you'll find as much technical information as opinion on why it's a bad idea. In a nutshell, DRM is the concept of controlling access to content and media. It's the ability to enforce the rights of a content creator (or manager) on a piece of data. For example, if I create a book, I may wish that only people who had paid for the book could read it. In the physical world, the idea is pretty straightforward. In the electronic world, however, it's difficult to enforce.
Over the last few years, there have been many attempts at implementing DRM, and in general there has been incredible push-back by users. In 1999, Intel put a unique serial number in the Pentium III chip in an effort to help individually identify computers. Since the serial number was not tied directly to any one DRM mechanism, there was quite an outcry against Intel. The serial number was seen as a way to track users and felt like a "Big Brother" maneuver. Intel was eventually forced to remove the serial number from future chips due to public pressure and legal battles.
The lesson from the Intel serial number incident is that a DRM mechanism without a benefit for the user is going to meet a huge amount of resistance. The iPod and iTunes Music Store (ITMS) provide a counterpoint to the Pentium III serial number. To convince the major record labels to put their content on ITMS, Apple had to provide reasonable assurance that the music wouldn't be easy to pirate. Apple created a DRM mechanism that, in general, has kept piracy to a minimum. (In reality, Apple has been in a cat-and-mouse game with some very skilled security researchers who have repeatedly broken their DRM mechanism. However, the amount of piracy attributable to these attacks is minimal.)
So why have users adopted DRM so readily in the case of the iPod? In a nutshell, Apple found the killer app for DRM. Users can get music cheap and take it anywhere they want. By July 2005, Apple had sold more than 500 million songs on ITMS. Consumers have spent more than a half billion dollars on DRM'd media, effectively giving DRM a stamp of approval. Apple made DRM cool with the iPod.