Quote - It will also not be possible (using any legitimate software anyway) to play protected Blu-Ray or HD-DVD discs on XP, Win2000, Win98 or even Linux, as in all likelihood the AACS group will not be granting any licenses for any software players.

The major fabricant of DVD players is China and also is the major fabricant of pirate DVD and CD,  and you can add to the list Taiwan, both Koreas and soon India too!
Do you think that they will need any license???, they just ignore the licenses.
As for software, you have P2P or sites for all your needs.
It's supposed that all these measures are against pirates, but you can the that the effect is NILL!
They only effect is over legal uses, that will have to pay the price of computer crashes, degraded performance and a lot of nightmares.

Quote - First off, the DVD device driver has absolutely no role in this.  Second, replacing any kernel-mode driver with your own would require cracking the kernel to allow it.

As in the XPs free of activation code, and they work without any problem.

Do you remember Poser 5?
Poser 5 was released with Microsoft activation code scheme, the result was that Poser 5 never worked, crashed all the time, and few people were able to use it.
Poser 5 only become something usable even with bugs with SR1 where the activation code was removed.
The activation code was responsable for most of the malfunctions of Poser 5, the remaing were Poser's itself bugs.
Meantime only one week later after the first release of Poser 5, a cracked version was available and circulating in P2Ps.

The intention of the activation code was to prevent piracy, but , Poser 5 activation code free soon was freelly available, so the protection was innofensive for pirates, but on the other side the activation code made an inferno the life of people that had purchased legally Poser 5.

Stupidity also evolves!