Most of us think this is covered by 'fair use' personal copy exemptions. An extensive Macintouch posting suggests things are much fuzzier:
...There is also the concept of 'fair use' which allows you to republish for the purpose of review, commentary, parody, etc. The standard is fuzzy with regard to how much you can copy and where the boundaries of fair use actually apply.There's quite a bit in the post. If a user purchases a lot of FairPlay protected music, and Apple has to prevent burning/playing of non-FairPlay protected music ...
Duplication for personal use (when not using a device with SCMS) is not permitted under the copyright law, except using a loose interpretation of fair use. Same for the right to copy music to your hard drive and load into an iPod. The recording industry says that these activities are not valid applications of fair use, but it has not sued anybody for them, so the matter remains a gray area.
Update: Looks like it is legal!
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