Don't you just love agreements hammered out by lawyers.
So the programs aren't encrypted, but the program guide is, and to get the free key for the program guide you have to agree to not be a naughty boy. I assume chasing people for breach of contract is easier than chasing them for copyright infringement?
IIRC Media center, certainly on XP, doesn't even use the OTA program guide... I assume that means we're free to be naughty?