John Markoff reports today on Paul Kocher/Cryptography Research's proposed software protection of DMCA content: http://cryptome.org/dmca-kiss.htm

Oh great. More complexity, more points of vulnerability. We already have cellphones that can be DoS-ed with a SMS message. The embedding of watermarks will make computer intrusions a very attractive way to "steal" content, which then can be widely distributed without too high chance of repercussions for the distributor, as the original owner will take the heat. Victimization, anyone? Besides, if the data are digital and personalized, the system will be vulnerable to algorithm disclosure (or at least watermark removal) by comparing several differently personalized but otherwise identical files. I believe I seen a couple proposed watermark attacks some time earlier. Matter of time until it will become a standard plug-in to P2P software. Another doomed attempt to keep the dying business model.