I'll try and explain.
Say you buy a DVD of a movie. To prevent piracy the movie is usually encrypted using Digital Rights Management (DRM) software on the DVD. With the appropriate permissions, your computer or DVD player decrypts it, using DRM in reverse, and sends it to the screen.
At the moment it is still possible to circumvent the encoding and watch it illegally, or intercept the decoded stream on the way to the screen and copy it, so that you end up with a non-copy protected version.
For HDTV and BluRay high-definition movies, the Recording Industry Association of America (or RIAA) and the Motion Picture Association of America (MPAA), who oversee recording and movie royalties, want to make this much more difficult, so they propose a system where the video stream stays in encrypted form all the way (the screen/monitor does the final decoding).
This is technically difficult; the encryptions have to change on the fly all the way, the DRM keys have to managed, and to be fully protected, the software and hardware has to be able to pick up any changes in it's environment that could be an attempted hack and lock down.
Essentially it demands new DRM hardware compliant motherboards, graphics cards and monitors that can cope with all this added crap. The added complexity is significant and these will all be more expensive. To some extent it slows the whole system up and adds failure points.
And there's only going to be one operating system that will understand and work with all this secret welded-in hardware - Microsoft's new "Vista" (though Apple may get a look in later) - only Vista will be able to play the new protected HD-DVDs.
Free and Open operating systems like BSD, Solaris and Linux (which are becoming more popular now as people get fed up with Microsoft's shenanigans), won't get a look in - much worse, they just won't work at all with the encrypted motherboards, graphics cards and monitors that Vista will soon demand.
"Oh well..", you may say, "Then I'll just use my PC for doing PC things and watch movies on my separate DVD player."
Well, just in case you do, Microsoft can and WILL "persuade" motherboard, graphics card and monitor companies not to release hardware that doesn't contain all the extra encryption chips. There'll be no choice at all.
"Compliance" with "requirements" of the RIAA and MPAA is perfect cover for their real game plan, which is to eliminate Open Source (Linux, etc). If Microsoft simply pressured hardware manufacturers (video cards etc) never to release specs, and also to spend billions making it impossible to reverse-engineer their programming specs, just to stop programmers from developing Linux drivers, they'd lose an antitrust action in court.
But by wrapping the plan up in the excuse that it's to meet RIAA and MPAA requirements, Microsoft has a perfect defense.
So in a few years time, apart from specialised scientific computers, Microsoft may have crushed all alternatives and it will truly be Microsoft only.
Finally they'll have the world by both balls.........