While it was settled out of court, so at least there wasn't an ultimate ruling, the publishers of DVD X Copy were forced out of business by the MPAA for producing backup software. While I'll not argue that a lot of people undoubtedly used it for nefarious purposes, it had legitimate uses, which seems to have been the thought behind the Betamax ruling. Of course, you had the power of Sony behind that case and a small company against the entire movie industry in this one.

I think this does not bode well for legitimate uses of such technology. When will they tell us that it's illegal to extract audio from our CDs?