"What the DMCA was meant to protect wasn't this," said Ken Dort, an intellectual-property attorney with Gordon & Glickson in Chicago. "In fact what (RealNetworks) has done is what people do all the time. They buy the latest, greatest widget of a competitor and take it apart."That is pretty much what I thought. Even if RealNetworks did reverse enginner Apple's product - that is perfectly normal in the technology industry with all big players attempting to reverse engineer competing products to save on R&D costs and time. This is normal so long as they do not use any copyrighted material. AMD does it all the time on their x86 processors. Even Intel is reverse engineering AMD's x86 64-bit processor.
Here is a post from Hydrogenaudio.org that sums up what Harmony from RealNetworks does when it transfers music to other portables:
"When transferring your purchased songs to the iPod, the AAC itself is not touched, but the Helix DRM is transmuxed to a DRM that is compatible with the iPod, i.e. fully protected and without trans-coding. If you then transfer the file back to your PC (for instance with Anapod), you get an M4P file, that is a protected MPEG-4 AAC file."Source: CNet