Fortune looks at legality of TV show swapping:

TiVo is a leading brand of personal video recorder (PVR) that saves shows to hard drives instead of cassettes. (Ironically, TiVo counts several of the plaintiffs in the SONICblue suit, like NBC and CBS, among its investors.) Consumers love TiVos for the same reason they make advertisers fret: you can record a show, watch it whenever you like, and quickly skip over the commercials. In the last year, older TiVos have been hacked just as thoroughly as DVDs. And now Microsoft has upped the ante with its new Windows XP Media Center Edition, which melds PVR hardware into PCs; users who have file-sharing programs like Kazaa aboard will be able to swap as much recorded content as they like.

The law that ensnared the DVD hackers, the Digital Millennium Copyright Act (DMCA), doesn't specifically address the question of PVRs. But when it comes to the legality of hacking digital media, the law zeroes in on "circumvention" — did hackers have to circumvent protection to copy the video? Several hackers who have published their techniques online say they didn't have to crack anything to extract video from their TiVos.

All they needed, they say, was a PC, a "TiVoNet" ethernet card ($100) and a program named ExtractStream. After being copied to the TiVo, which runs on the Linux operating system, ExtractStream locates the video and audio data on the TiVo's drives and begins playing them back, recording each separately. They're copied later to the PC to be rejoined and saved.

"TiVo didn't publish how to extract video from it but they also didn't take any preventative measures," says Chris Chiappa, who by day is a software engineer at a major database company. "It would be more accurate to call it 'reverse engineering.' I don't think it could be found illegal."

While Chiappa is not a legal expert, an attorney with past experience in DMCA litigation who asked to remain anonymous thinks he may have a point. Early TiVos stored video in a proprietary file system (one that wasn't transparent to PCs) but wasn't encrypted per se. "We think of protected access in the sense of a locked door," the attorney says, "and I don't know that there would be a claim that the design of TiVo to keep a recording in the box is a technological measure that effectively controls access." In other words, because the TiVo was designed to record video, users may be able to legally record to wherever they aren't specifically forbidden.

That's a moot point for most TiVo users now — the current models boast "military grade" encryption — but it may help make the case for new owners of Windows XP Media Center Edition PCs when they start swapping. They certainly have it easier — instead of having to pry the recorded TV from the guts of Windows, it's stored neatly in a folder named "My TV." All a user has to do to start sharing video files is select that folder while using the online swapping software.