Re:Region codes? (Score 5, Interesting)

The region settings are indeed handled by the DVD drive.

When you play a DVD, the first thing the software player does is to ask the DVD drive to return the DVD disc's title key. This key is needed to decrypt a CSS-encrypted movie.

On a Region Protected drive (or RPC-2 drive) before acknowledging this query, the drive first checks that the region of the inserted disc matches the drive's own region.
If they don't match, the drive will simply not return the Title Key. Hence a Region 1 DVD will not play in a Region 2 drive, etc.

Until now, the only way to defeat this scheme was to act upon the drive itself, by flashing a "patched" firmware.
In this firmware, the region check would have been disabled (with other things) so that the Title Key would always be returned, regardless of the disc's region.

Because this region checking was hardware based, it seemed for a long time that no software only solution would ever defeat it, and that the only solution to make your system region free would be to flash your DVD drive.
However, people using DVD-Rippers (DeCSS, etc.)soon noticed that they were able to rip the content of a disc on a region protected drive, regardless of whether the disc region was matching the drive's one or not.

This gave the idea to a few people (this is the 3rd product I know of that makes use of this feature actually) to create "virtual" DVD drives, i.e., fake drives that would rip from the actual DVD drive on one side, and appear like a standard DVD device to the software player on the other side, while feeding it the ripped data.
Of course, as such a software offers complete control on both the (virtual) device and the (unscrambled) data that flows through it, getting rid off all the annoyances like region checks, FBI warnings or Jar Jar Binks characters becomes child's play.

This little tool looks really cool though...