Anyone who has never heard of Palladium (in the context of Microsoft, anyway), should check out the
TCPA / Palladium FAQ by Ross Anderson. It gives a very good overview of what the concepts are and some perhaps paranoid extrapolations of what it could be used for. It'd be nice if all of what he says could be tossed off as paranoia, but in the long run, if all the companies invested in this technology had their way it would be quite non-fictional.