Quote - Out of curiosity...how does "Hard_Lock keys" (Dongle's) stack up against (compare too) mass produced keys made from a "Gold Master Disc"(Matrix),

Quote - For example...Let's say I took my Lightwave dongle over to my neighbors house, and removed his dongle, and inserted mine, would I be able to run his/her version of Lightwave? (Given it's running the same Sentinel Driver)

If the software is mass production, your neighbour's dongle must work with you.
But this is no problem, the purpouse of the dongle is to prevent pirate copies, if your neighbour has a dongle it means that he has purchased the software.
You can make any copies as you want of the software, install it on all the computers you want, but you will need the dongle installed to run the software, so you only can run one software at the same time. If you want to run the software at another computer where the software is also installed you must remove the dongle from one computer and put it in the other computer.
You have a great flexibility in use of the software, you only need the dongle to run it, the problem is only when you put the dongle somewhere that you don't know where it is.
The protection works fine, it's very easy to copy or download a software, but how do you copy or download a dongle?
To copy a dongle is not an easy task, even it can be done.

 

Quote - BTW...although I'm sure it would drive up software cost's

Yes it does, the cost of a dongle is not high, can be 20$ that is very much bigger than few cents of a CD, but this is not important becausedongles are used by very expensive software. Someone that sells a software for 5,000$ or more would not care to spend 50$ more in the cost. To have a profit of 5,000 or 4,950 will not make any difference.

Quote - , I think the "Dongle Approach" would be the most secure.(although I know a dongle can be faked with a software dongle that tricks the application into thinking a hard-lock key exists, I would think that it's gotta be harder to crack).

Well, it is not. As any software with serial numbers, registration scheme, specially burned CDs is cracked, Microsoft XP activation code is cracked, so dongle protected software is cracked in the same way without any trouble and a downloaded lightwave work will work fine without any dongle.
The easy solution, you don't copy the dongle, you crack the software that use it!

Stupidity also evolves!