The latest on the 'Net is that AACS DRM used by both Blu-ray and HD DVD has been cracked using BackupHDDVD tool.

Below is the video posted to YouTube.com showing the process:

We don't condone piracy here at RedmondGadgets.com, but if this is true it's definitely news. According to engadget.com, you can use BackupHDDVD to decrypt and dismantle the AACS using a Windows PC. Once that's done you can store the video on your hard drive for playback on any HD DVD player.

UPDATE: Chris Lanier has some input into this issue. According to Chris, the key issued to Cyberlink was compromised, and most likely will be revoked to correct the issue.

UPDATE: This story is making rounds all over the 'NET. CNET has a story that continues this topic and how companies are investigating this more.

Additional coverage is also available at ZDNet.

The entire topic is still somewhat confusing, it appears to be on a per title basis that the keys were compromised. If this is so, then it still makes it a complex process.

Whether or not the reports are true or to what extent the crack is, there is no doubt that sometime down the road AACS will be cracked and the process of extracting the video files from both Blu-ray and HD-DVD is inevitable. As long as the disks can be played on a PC, there will no doubt folks who will figure out to break the encryption and make the process available to the masses. It happened with DVDs, it will happen again. Studios are going to have understand and deal with this.

UPDATE: A follow up has been posted by the developer of this technique.