You log into the iTunes Store. You buy music. It only plays on your authorized computers. In theory this helps keep illegal distribution of music over the internet down but in reality it is just a hinderance to everyday users that are required to register their iPhones and iPods and computers to play their own files that they legally own.
Apple started catching onto the idea that this whole DRM music thing isn't a concept to be continuing into the future and reached an agreement with the label EMI last May and starting the "iTunes Plus" service allowing purchase of DRM free music from the iTunes store. Since then EMI along with other major labels like Universal Music Group, Warner Music Group, and Sony BMG have started offering their music DRM free via routes other than iTunes like Napster, Amazon, and MySpace music.
While the iTunes store doesn't seem to be doing half bad in sales in the last year Apple needs to make the move to DRM free music across all of its..