An excellent article from Fred von Lohmann at EFF:
President Obama reportedly gave an iPod, loaded with 40 show tunes, to England’s Queen Elizabeth II as a gift. Did he violate the law when he did so?
You know your copyright laws are broken when there is no easy answer to this question.
The issue stems from how the law deals with bits (MP3s, software and Kindle eBooks) differently from atoms (CDs, paperbacks). If the President had bought a CD for the Queen (of the band Queen, no less) it would have been perfectly legal. But digital music, on the other hand, is much murkier territory— you own a “license” not the music. The article at EFF does much better justice to the topic, so read the details there.