More than two years after the original complaint was filed, the lawsuit alleging that Apple unfairly blocked competition with its locked down iPod and iTunes ecosystem has reached a milestone. People who bought an iPod between September 12th 2006 and March 31st 2009 have started to receive an email informing them of the case's class action status, and letting them know how their rights will be affected if they don't opt out of the case.
The lawsuit stems from an Apple software update in December 2004, which blocked a workaround developed by RealNetworks allowing its Harmony DRM-protected tracks to be converted into Apple's FairPlay format. This allowed music purchased from Harmony to be played on an iPod while remaining copy-protected. The class action complaint describes Apple's behavior as "stifling competition" and that it "allowed Apple to further entrench its monopolization of both markets and enabled it to sell the iPod at prices far above those that would prevail in a competitive market for Portable Digital Media Players." As you might expect, Apple refutes all of the complaints.
The effect on your rights should you choose to stay in the case is fairly simple: you lose the ability to sue Apple again over the issue as an individual. Assuming that your iPod hasn't already been recalled, of course.