"Just over a month after consumer backlash caused MSN Music to rescind its decision to deactivate the digital rights management ("DRM") servers that allowed MSN Music purchasers to "reauthorize" music files after upgrading operating systems or buying new computers, Yahoo! Music has decided to deactivate its own DRM servers.
The ironically named Yahoo! Music Unlimited Store will shut its virtual doors in September, and, as of October 1, will no longer provide license keys for music purchased from the store, nor will it authorize song playback on additional computers. That means Yahoo! Music customers will not be able to transfer songs to “unauthorized computers” or access the songs after changing operating systems. Yahoo! advises customers to back up their music to a CD if they want to be able to access it in the future. In other words, Yahoo! wants its customers to invest more time, labor and money in order to continue to enjoy the music for which they have already paid. In fact, the more music they bought, the more work they'll have to do. What is worse, this suggestion could put customers at legal risk, as they may not have documentation of purchase. Furthermore, there is no certainty that all relevant copyright owners would agree that making such backup copies without permission is lawful."
Update: Read Ed Felten's take on the whole mess.