Nearly every time a new DRM-enabled product is launched, you can be sure that it is only a short matter of time before the system is cracked. This time, after much debate over the effectiveness of the DRM on Windows Phone 7 applications, hackers have demonstrated just how easy they can make it to pirate Windows Phone 7 apps.
An application called "FreeMarketplace" ‒ which mind you is not available to the public, but is just a proof of concept, a demonstration of what is possible ‒ allows you to search for applications on the marketplace, downloads them, remove the DRM, and deploy it to a phone or emulator all from one application! In this case Microsoft has been notified of the hack in question, and the ball is in their court.
While the application, nor the code / technique behind it will be made public by its authors, it is only a matter of time before someone will different intentions manages to achieve the same effect.
Check out the following video of the application is question: