According to reports the AACS (Advanced Access Content System) DRM used on both HD DVD and Blu-Ray movies has been circumvented. A hacker by the name of muslix64 has released a tool called BackupHDDVD including its source code, and posted a video at Youtube showing how a movie is decrypted and then played back from a hard disk drive.
A new version of the software is scheduled for early January, which will hopefully shed some light on how the decryption keys are obtained. If there's a vulnerability in PowerDVD that allows the keys to be extracted, the software will most likely be removed from the list of allowed playback keys in future HD DVD movies. Nevertheless it will always be possible to extract the decrypted data stream in some manner as long as computers and operating systems are "insecure" (from software's point of view).
With the AACS decryption method out in the wild, it will probably not take too long until HD DVD movies surface on the Net and P2P networks.
If you're interested in the software, you can download it from our download server here. Basically all it does is decrypt the AES encryption on the movie using a key from TKDB.cfg config file.
Sources:
Doom9
Engadget













