The drive will allow you to change the region four times before it locks to the fifth change. So will probably your DVD-decoder/player (unlicensed decoders - and I'm not talking about 'warez' here - will not have this limitation). Both these protections work independntly of each other. The software lock might be overridden by software such as DVD Genie. As for the hardware lock, some drives have utilities leaked from the manufacturer (or made with technical documentation leaked from the manufacturer) that will reset the count, and if you wish to void your warranty there are modded firmware avalable for almost any drive, yours included.
Not that the above may, or may not, be illegal depending on your location. If you just want to watch that one Region 1 disc you prpbably can, but you will use up two of the available changes in the process. In W2K/XP you can see the number of remaining changes in the Advanced Properties tab for the drive in the Device Manager.
you can rip the dvd and remove the region code from it (must ripping tools have this ability built in), and then watch the move from the files or imge on your hard drive. the legality of such a solution may vary depending on location as well.
I edited the firmware link, as I had put in the wrong drive. The rpc1.org site isn't always the most reliable, so if it appears to be down try again a little later if you wish to flash your drive. As for software, DVD Genie can change the region in PowerDVD even after it's internal counter have reached five. Or you can, as see colon mentioned, use a ripping tool such as DVD Decrypter to remove the region protection.
Why they do it? Originaly it was to stop parallel importing of DVDs through 'unauthorized channels' i.e. to keep the movie companies in control. For example, they might want to release a movie at different times in different markets, or they might want to have different pricing depending on region.
