aminoacid:tims, how did you perform "Windows 7 DRM system to restore the WMC/WMP capability".
I followed the instructions in the "Things to Try" section of KB929642, which restored
my ability to play DRMed music files not currently in the WMP12 library in WMP12. To
restore the ability to play files currently in the WMP12 library, I had
to reset the library per zachd's instructions on that, which requires
stopping the WMP Network Sharing Service and renaming the "Media Player"
folder in %LOCALAPPDATA%\Microsoft. I did this from another account,
and when I logged back in and started WMP12, it began rebuilding its
libary, and I could play everything, including Zune DRMed files.
Again, I have no idea if this is going to help you, and I did it just for the small amount of DRMed music I have. I was just trying to clear up a minor annoyance, and it didn't really matter a whole lot if it worked or not, as everything played okay in the Zune software. It would have continued to nag at me, and that's about it. It was only a couple of weeks after I did this that I gave up on WMC/WMP for music anyway and removed all folders from the Windows 7 Music Library due to the extremely poor performance and interminable library rebuilding.
The KB article warns:
Warning This procedure affects all media files on the computer
that use Windows Media DRM technology. The effect of this procedure is
not limited to media files that you obtained from the Zune Marketplace.
If you follow this procedure, content licenses for all protected media
files on the hard disk are deleted. Other providers, such as, Napster,
MSN Music, and Wal-Mart, use different mechanisms for restoring
licenses. If you have content from other providers, examine the
appropriate license restoration policies before you continue.
I recommend trying this only as a last resort, and only if you have an image backup of your OS drive.