"There is nothing that is stopping people from repackaging the "cracked/hacked" version and distributing it as well. Therefore, the insinuated effectiveness of the protection scheme is a false sense of security, IMHO. If someone was willing to give away "free" copies based off their "legit" copy, they are equally as likely to distribute the cracked/hacked version as well."

Of course they will do so - but the net number of illegal copies involved there is much, much less than the casual copying would have allowed initially. This has been shown time and time again for programs that tie the software to a specific machine (as opposed to a generic "key" system like Win98 or Photoshop).

Of course there will be a crack.... but that isn't important. What isimportant is that relatively few companies and home users are willing to allow cracks into their systems... especially as security problems and viruses are on the rise.

I have personally seen client shops purchase many new windows licenses as a result of the XP protection, because there is NO WAY they are going to trust their data to a cracked OS whereas they felt completely confident using a keygen. Of course, WinXP keygens do exist but SP's have a tendency to break those -and they DO want the bug fixes in the SP's.

In the 3D community look to Brazil and finalRender. While both systems are highly desirable and expensive it is very uncommon to see cracked or pirated versions on the net, and I am willing to bet there are almost non in production use for example.

In the end, if you force users to crack your software rather than casually copy it your piracy rate goes WAY down, and will continue to go down the more security conscious people become. Because it is insane to try and secure your machine when you are letting some 15 year old who has already proven he is willing to be a felon (the cracker) put code on your machine.