Digital watermarking - as far as I can tell - is really good, covering situations such as digital to analogue conversions (I really thought there would be an easy way around it). It's a solid system for the labels - journos are rightly anxious about being named as the cause of a leak).
So you can't play your copy with a pc and then record the audio directly from the soundcard with software, without these watermarking being transferred onto the recorded file?
Someone should hack this damn system.
the digital watermarking is most likely actually in the waves of the songs themselves - not matter how much you re-record, transcode, etc, it will still be present (no matter how inaudible) in the recording. it's not like copy protection, there is no way around it.