It's not the first time that Apple's FairPlay DRM has been circumvented, but it appears that by importing a song into iMovie and then exporting it the DRM gets removed. There's no word on whether a loss of quality is involved. Quite how Apple will get around this is anyone's guess. They could make a “critical-update” available to iMovie to block this, but anyone that's taking advantage of this is unlikely to install an update that might disable the functionality. Alternatively Apple could just sue themselves under the DMCA ;-)
Update: Turns out iMovie does a re-encode of the file, so it's not really stripping the DRM - it's little different than burning to a CD and ripping from the CD.