So, Virgil, it's technically illegal for me to input the "magic code" into my Oppo that switches it to Region-Free mode, because it was purchased in the US? But if I buy the same player from Australia (probably a different power cord? Never been there, don't know), where they must be sold Region-Free (and therefore, the low-level programming switch has already been thrown) then it's perfectly okay? (I'm aware of the DMCA provision against "circumvention", so this question is semi-rhetorical)
What if I bought it while living in the US, from Australia? Sometimes, I get the sneaking suspicion that our legislators have no clue what they're legislating. And, if I pointed out such loopholes to them, they would probably, RATHER than seeing the error of their ways, instead try to make it illegal to import region-free players. But just for individuals, corporations have valid uses for such things...
Also, you mention that DVD movie region encoding is illegal in Australia; how has that fared with the 360 or PS3? Do their movie playing capabilities have to be region free, but their game playing capabilities are allowed to remain region-locked?