DRM (digital rights management) is a set of technologies used by publishers and copyright holders in an attempt to try and control how their content is used, both physically (as far as copy protection for CDs etc.) and digitally via technical protection measures, a "wrapper" of specific code added to the material that restrict the use and access of the media on certain electronic devices.
The wikipedia page on DRM is a good place to start for a quick overview.
In 1998, the US Government passed the DMCA (Digital Millennium Copyright Act), an amendment to US copyright law, which basically outlaws the circumvention of DRM systems.
http://www.copyright.gov/legislation/dmca.pdf
One of the main controversies surrounding DRM is the notion that it may interfere with the fair use doctrine, an integral part of US Copyright Law, that allows reproduction of copyrighted material under certain conditions:
Copyright act of 1976, 17 U.S.C. § 107. Limitations on exclusive rights: Fair use
The major players in digital music, iTunes, Napster, RealNetworks, and Microsoft, all incorporate some form of proprietary DRM into their systems, which can create problems for users that wish to access the music across platforms, or on remote devices, even while operating underneath fair use guidelines. The main question is, as long as the online providers have control as to the use of their products, do we really own the music we purchase?
The Electronic Frontier Foundation has put out a simple guide to let folks know exactly what restrictions are implied when purchasing music online from the major companies, and also places like emusic.com, where people can buy DRM-free music:
The Customer is Always Wrong: A User's Guide to DRM in Online Music
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