Here's an interesting post from a Microsoft employee called "Zune Sharing explained"
I still have a few questions.
Is there any way to offer non-DRM content from a Zune hot-spot with unlimited playback restrictions and/or that can by synced back to a home PC? If MS allows such a thing then I predict every college dorm will spring up a crop of open hot-spots where Zune users can pirate from a wide array of personal music collections.
If Zune doesn't allow such a thing then the usefulness of distributing open content such as movie trailers and other commercials is severely diminished. As an advertiser, I'd like to remove the 3 day restriction but MS can't really allow that. Catch-22.
It is interesting that no DRM protection is provided for photographs. I can only assume that unlike the RIAA and the MPAA, there is no body of publishers holding image rights that would immediately sue MS over unfettered trading. However, I again predict that college dorms will offer open hot spots of free porn that you can pirate directly to your Zune.
Also, if they allow any way to share data and sync it back to a home PC, then couldn't I use that for music piracy? For example, I put "Nickelback - Far Away.mp3" on my Zune. Then I simply change the name to "Nickelback - Far Away.jpg" and put that on my Zune too. When I want to give the song to you, I send you the jpg file which you sync back to your home PC and rename it back to mp3. Problem solved.
Maybe Zune is smarter than that, and it will somehow prevent sharing "corrupted" JPEG files, but that's just a simple example of how I might work around the MS restrictions. I expect more creative solutions.