To clarify the somewhat vague statement I made about "business rules" for DRM changing in Emerald (Rollup 2), the changes were to include the new COPP (Certified Output Protection Protocol) support in the release and to support the new version of the DRM engine.  The actual behavioral changes in Media Center are not that great: we included the new "CopyNoMore" setting (previously "Reserved" in the CGMS-A standard) in our matrix of when to apply COPP, and were the "ship vehicle" for the new version of DRM from the DRM team. 

Whether we even engage DRM at all is governed by those "business rules" I was talking about; it's a matrix that defines which protection level we apply to the recorded content based on multiple input vectors.  The entire response matrix is quite large, and defines things like whether you can create a recording1, whether DRM encryption is applied2, whether we permit recording the content to portable media, and whether to allow presenting the video over an given output3.  In a nutshell, DRM protection/encryption is only triggered in existing analog scenarios when the input content is protected by a) CGMS-A, b) PAL's Copy Protection Flag, or c) Macrovision.  Realistically, you're only going to see Macrovision if you are doing pass-through from a VCR or DVD player, or you live in Korea and get your TV from a certain satellite service. 

I've only personally seen CGMS-A broadcast on HBO & Cinemax, Showtime, and other "premium" channels.  VOD channels are usually marked CopyNever, while scheduled premium channels generally have CopyOnce tags.  I hear via forum postings that some people are seeing Fox News' "The O'Reilly Factor" getting marked as Copy Protected in Media Center, but I haven't witnessed it myself.  There's certainly nothing stopping broadcasters from setting the 2-bit attribute in their VBI data.

1 - true for everything but CopyNever content
2 - true for everything but CopyFree (or no CGMS-A at all) and no Macrovision
3 - governed by COPP