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The restriction that Google's Video Viewer can only play back files that were stored on Google's server has been removed, thanks to a hack from Jon Johansen, also known as DVD Jon. The fix requires a .Net runtime to work to remove the restriction. Naturally, Google is advising people not to install DVD Jon's software on top of Video Viewer.
The company said in a statement that it could result in security vulnerabilities on their computer and may disrupt their computer's ability to access Google Video.
Johansen is quite a famous chappie in the computing world right now, thanks to some brilliant hacks on his part. His decryption software permitted Linux users to run DVDs on their PCs, and he cracked the CSS (Content Scrambling System) copy protection mechanism that DVDs use.