Correct Me if I’m Wrong…

I was reading this piece in the Times called “How Important is Copy Protection?”, and this part interested me:

“The fact that the “legitimate” music-download sites place copying restrictions on the songs you buy is, of course, a little silly, because they still let you burn your songs onto CD’s. And once they’re on a CD, songs are no longer copy protected. You can copy them onto your Mac or PC, upload them to Napster-ish Web sites, and make as many copies as you want.”

The writer goes on to call this a “Texas-sized loophole” in the DRM.  Is this really the case?

1.  I assume that by burning he does NOT mean burning WMA files onto a CD.  As far as I know, those WMA files will retain their restrictions even on the CD.  So, he must mean that the music services allow you to make audio CDs, rather than data CDs.  That had always been my assumption.

2.  If that assumption is correct, then, sure, you can make many copies of the CD.  But you cannot make quality MP3s or WMAs from those CDs.  The tracks are already compressed to 128 kbps.  If you burn them as an audio CD, and then rip them again, the result should be an even more compressed version of poor quality. Thus, that loophole is largely irrelevant.

Is this right? Anyone use Pressplay or know the details?