(1) What does "compatible with most major Linux distributions like Ubuntu or Fedora" mean? It's a separate distro, right? I've never heard of one distro being "compatible" with another.
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mkxpud is an image generator, and a binary-level build system very similar to Woof of Puppy Linux.
We don't want to handle the package dependencies, so we just leverage APT/dpkg. When running mkxpud, it reads project config (called cookbook), parse it into package settings (called recipe), strips directly from a working Debian/Ubuntu Linux, extracts them into root filesystem and finally generates image.
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I didn't make the law, but technically, what you describe is not lawful. I think, technically, you can do it... but vendors can't distribute the compiled code that does it without a license from the DVD consortium folks.
It depends on the type of DVD you use. If for instance it's a movie DVD using something like CSS (remember DVD Jon?) and you access it's content by breaking the CSS "protection" then you're right. Basically if you need specific codecs or circumvent certain "protection" layers it would probably be something that you might want to check with a legal expert. In any other case where you want to access a plain DVD, AFAIK this is completely legal anywhere in the world.
(1) What does "compatible with most major Linux distributions like Ubuntu or Fedora" mean? It's a separate distro, right? I've never heard of one distro being "compatible" with another.
(2) Does the "media player" play DVDs?