DRM in 7 is the same as in Vista. What it comes down to is what's now known as "Trusted Computing". It's the idea that through control of the hardware, the operating system and/or the installed media playing software (ie Cyberlink PowerDVD, Intervideo WinDVD etc) can do hardware checks to verify that the hardware devices such as your graphics card and monitor meet HDCP (
High-bandwidth
Digital
Content
Protection) standards to try to prevent copying a piece of media (such as a video, DVD or song) illegally. Although it works to a certain extent, it is easily circumvented by figuring out the encryption key(s) used to encrypt the digital data on the disc or within the file you're trying to play back (for example, Slysoft's AnyDVD HD software

).
For further info you can read the following Wikipedia articles: