We've discussed this on the BBS before... Anyone got links?
The RIAA would have liked to make us think that any digital rip of a CD is illegal. Their wheeling and dealing with the lawmakers regarding copyright law many years ago (the AHRA) resulted in a "tax" on audio recording media, thus allowing the RIAA to get some sugar every time you made a copy of a favorite album. But they didn't count on MP3 ripping when the AHRA was written, and there's no way to tax an MP3 rip. So the RIAA tried to make everyone believe that ripping their own CDs was illegal.
Problem is, they could never make that stick. Just because MP3's aren't covered by the AHRA doesn't mean they're illegal. They're your CD's, you can make copies of them till the cows come home. That's always been just fine. If I recall, the RIAA eventually backed off and admitted yeah, OK, it's fine for your own use. The article you link (which is from over a year ago, by the way) was just talking about codifying something that was already a standard practice.
Clearly I'm using the US-centric examples here, but similar things played out in other jurisdictions.