Blu-ray regions are slightly different than DVD regions, AFAIK, but I would guess players would region-restrict both DVD and Blu-ray, using each respective region-coding. Its a good question actually, maybe someone knows the actual answer; in any event there are region-free players being made, hopefully these will stick around and not fade away.

As far as that copy-protecting issue, its news to me--where did you read that? So many newspapers and mainstream magazines have such ridiculously inaccurate info, often designed either to sell something with slanted or misinformed opinion or create controversy with slanted and misinformed opinion, that I'm inclined to take it only with a grain of salt for the time being. It would be a silly move anyway, since everyone knows encryption gets cracked eventually.