HDTV copy protection has been an issue with content providers since day one. If you plan on holding off a projector purchase until all this stuff is worked out, plan on a LONG wait. This battle has been going on for years already.
Last I heard there were two competing approaches being seriously considered. One is being championed by JVC. It is called HDCP. This approach requires encrypted DVI connections between set top boxes, HDTV VCRs and HDTV displays. The signal is kept completely in the digital domain, encrypted, until it reaches the display device. It is questionable whether the set top boxes or VCRs will even provide analog outputs, but it they did, they would only provide a down converted non-HDTV signal (540p?). With HDCP, broadcasters will have the ability to dictate whether a program can be time shifted (ala TIVO), recorded once, more than once (copy of a copy), or not at all. This is considered by most people here to be the most undesirable approach. If your projector does not have HDCP support, you will not be able to view HDTV in it's full glory. Since no projectors today (other than a prototype JVC D-ILA) support HDCP, none of our projectors will be fully compatible with this format. This one is favored by many studios since it offers the greatest copy protection. Of course, since most early adopters absolutely hate this idea, it is doomed to failure.
The second approach is called 5C copy protection. It has backing of several companies, Sony being one of them. This one uses firewire connections between set top boxes and HDTV VCRs, similar to what is being used in the Panasonic TU-DST5x and the PV-HD1000 VCR (although its unclear whether these actually support 5C). This is a less draconian approach and will not obsolete today's HDTV sets and projectors. I believe it offers broadcasters most, if not all, of the same protections as HDCP, but it does support analog outputs.
If you search the HDTV forums for 5C and HDCP, you can find out a lot more about these competing technologies. I believe that some form of copy protection is inevitable. It actually sounds like good news that 5C might win in the end.
[This message has been edited by belmore (edited 07-18-2001).]