SDMI compliance is required for using the wma's (is that the same as DRM?).

No, it's not. SDMI (secure digital music initiative) is all about keeping track of the generation number of a copy. You can make a single digital copy of a copyrighted track, but you cannot copy a copy. For example, DAT won't digitally output a non-original copyrighted track. It might be even more restrictive than this -- we last looked at this stuff for the Central.

DRM (digital rights management) is about managing the rights of the distributor of a piece of music. It usually implies that the music is encrypted in some way -- it wouldn't be much use without it -- and allows for the distributor to put all kinds of restrictions on the content. Example restrictions might be: binding the content so that it can only be played on a particular device; putting an expiry date on the content, so that you have to pay a subscription; putting a maximum play count on the content; etc..

So what does this mean for the Empeg?

If they use DRM (particularly MS DRM), it almost certainly means that you can't use them on the empeg.

Edit: correct SDMI expansion