[Olympus]

Another suggestion in a similar direction.

Each buyer get's a personalised JPG containing the cover art an his/her purchase e-mail
In the JPG is the text of the book "watermarked".

The reading software uses the JPG as cover, when users starts reading the reading software extracts on the fly the text and keeps this in memory. Probably using a public/private key encription supplied by the PUBLISHER.

Should a simple user tamper with the JPG picture then his books becomes unusable. When he shares his "unaltered" copy then his "credentials" are shown on the JPG- cover.
Advanced piracy is not prevented but I accept that as a fact of life. Normal consumers just get all the advantages of a normal book without DRM, and can even share their books like in real life, but the reader is always reminded of the original purchaser by looking at the cover art that display's their registration credentials.

Publishers should register a public/private key registration with the ISBN institute. And Mobipocket (current defacto standard) and the few readers available should be updated to perform this "trick".
(I should "patent" this idea??)