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It looks like Apple is releasing a way for merchants of DVDs to include copies destined for iPods and that the capability will be flipped on with iTunes v7.6.
Quoted: Apple Mac News and Rumors
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This has the air to me of something that wasn't planned initially, but Jobs is reacting to the bad press about the "closed" iPhone/iPod Touch. Seems he's a lot more flexible now. It took 20 years for Apple to release a mouse with more than one button.
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smart move.