It's High definition Digital Content Protection, if you didn't already know. If you didn't, don't feel bad. It hasn't gotten near the press it needs. It's hardware protection for content and it means things like no matter what software you use, there is NO WAY to play a DVD on a machine equipped with it. And, should you manage, the system can phone a central keyholding authority and revoke ALL certificates on the machine, meaning no more playback of any protected content - ever!
The content owners are winning. And not only are they protecting their own rights (as they should) they are removing all your fair use rights. Ain't life grand?
The system is quite vulnerable, owing to 56 bit keys and the fact that the handshaking between devices is unencrypted and can be snooped upon to the degree where the system can be spoofed to see an HDCP compliant device where none exists. But doing so would definitely make a felon of you, even if you are simply implementing your fair use to back up content, because circumvention of such systems violates our beloved DMCA.
The article linked to above, by Jake Carroll, is must read for anyone who cares about fair use of digital content. It's a bit long and fairly dense, but everything is stated in such a way that you needn't be an uber geek to understand.