Cory Doctorow has written an editorial for tha SJ Mercury News that provides the best explanation I've seen so far at what the hell is going on with this BPDG thing:
Hollywood wants a stranglehold on your digital technology.

The people who fought tooth and nail to keep VCRs off the market will have a veto over all new digital television devices, including digital television devices that interface with personal computers. The next generation of home entertainment systems will include only features that don't inspire Hollywood's dread of infringing uses, no matter what the consequences for you, the owner of the device. With today's VCR, you can record an episode of "The Simpsons'' and bring it over to a friend's house to watch. This "feature'' won't be included on the digital VCRs and DVD recorders of tomorrow until and unless Hollywood executives decide you deserve it -- until they decide that the technical means of allowing neighbor-to-neighbor sharing of video won't open the gate to the Internet piracy bogyman.