HDCP is digital encryption of the signal carried by the DVI/HDMI cable between the PC video card and the display device. The idea is to plug a perceived hole in the signal path, whereby high quality digital video could be theoretically ripped from the DVI/HDMI output and re-encoded for distribution at the original resolution and bitrate.
Obviously the content maf^H^H^H owners/distributors aren't too thrilled about the idea of full bit-rate, 1080 line content being transmitted unencrypted, even if it is only between the video card and display. To appease them, Intel and Silicon image came up with a bolt-on encryption system for the DVI/HDMI standard which could be built into DVI transmitter chips to close the hole.