What is DRM?
DRM or Digital Rights Management is a method of protecting music and movies from being copied to places that its copyright owners do not want it to be. For instance, when you buy a track of music from almost any online store of from your mobile phone, there are designations on where it can be played. When buying from iTunes, tracks can only be played on Apple manufactured devices. When buying music from the Verizon store, that music can only be played on your Verizon phone. With movies, this means that a film bought in England will not be playable on devices manufactured for the United States. Anything done to make these media playable where they would otherwise not be is illegal; this is even though the media has been legally purchased! This is contrary to laws on the books that outline the first sale doctrine, which essentially states that 'if the copyright owner licenses someone to make a copy (such as by downloading), then that copy (meaning the tangible medium of expression onto which it was copied under license, be it a hard drive or removable storage medium) may lawfully be sold, lent, traded or given away.'(Wikipedia--First Sale Doctrine)
Further explanation, from the Electronic Frontier Foundation:
The Customer Is Always Wrong: A User's Guide to DRM in Online Music
There is an increasing variety of options for purchasing music online, but also a growing thicket of confusing usage restrictions. You may be getting much less than the services promise.
Many digital music services employ digital rights management (DRM) — also known as "copy protection" — that prevents you from doing things like using the portable player of your choice or creating remixes. Forget about breaking the DRM to make traditional uses like CD burning and so forth. Breaking the DRM or distributing the tools to break DRM may expose you to liability under the Digital Millennium Copyright Act (DMCA) even if you're not making any illegal uses.
In other words, in this brave new world of "authorized music services," law-abiding music fans often get less for their money than they did in the old world of CDs (or at least, the world before record companies started crippling CDs with DRM, too). Unfortunately, in an effort to attract customers, these music services try to obscure the restrictions they impose on you with clever marketing.
see the full article here
Links to more info on DRM
DRM--Wikipedia, very thorough
First Sale Doctrine--Wikipedia
How to explain DRM to your dad--Wired Blogs
DRM--EFF.org