We've known for some time already that Amazon's AZW files are actually Mobi files, but Amazon didn't share Kindle's Mobi PID which would allow one to buy encrypted Mobi books for Kindle.
DRM refers to the fact that you can't view Amazon Kindle books on other devices (including your computer), or on other Kindles - i.e. no sharing, the purpose of DRM.
Hack let you convert encrypted Mobipocket files that were intended for another reader so that that work on Kindle.
If you read some of the Kindle discussion groups, you'll see people complaining about "no backlighting", and then a few days/weeks later they will be lauding the fact that it has no backlighting.
A revolutionary portable reader that wirelessly downloads books, newspapers, magazines and blogs to a crisp, high-resolution electronic paper display that looks and reads like real paper, even in bright sunlight.