My memory is fading...
But it seems either the reporter (or the lawyers - I can't tell which) have got the story slightly back to front.
You've *always* been able to put non-DRM music on any iPod via iTunes. However, if you want to play DRM'd music on an iPod then it has to be Apple's own. I suppose this is what Real are complaining about: "Apple won't let iPod users buy crappy DRM'd music from *our* store!"
The problem for Real was that iPods were popular and Apple weren't interested in letting them put Real's DRM onto iPods
If I remember correctly, there was some "hack" around at the time which fooled iPods into accepting content from Real networks by fooling the iPod into thinking it was talking to iTunes and Apple closed this loophole by pushing out a firmware update.
Or did I get this wrong? I don't remember "iTunes" ever "blocking" users from putting content on an iPod. On the other hand, it's never offered a choice of "DRM'd music store", but seeing as the music-buying public had already got bitten once and quickly flocked to non-DRM stores instead (emusic, We7, Amazon and now iTunes Store), this is a moot point.
If Real had had half a clue, they'd have recognised this and offered non-DRM music. Problem solved.