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The High Definition Multimedia Interface, abbreviated as HDMI, can carry both audio and video signals. The HDMI connection is the standard connection for carrying high definition (HD) content. If you have a device that has an HDMI connection, such as a PlayStation 3, and a TV with an HDMI connection, it is the best practice to connect the two with an HDMI cable.
With the HDMI connection, we have the High Definition Copy Protection (HDCP) issue. HDCP is brought to us by Intel to enforce the "fair use" of high definition content - in other words to avoid piracy. It is a proprietary protocol (and thus should be licensed) which encodes the HD contents before it reaches the video playing equipment and decodes it in the display equipment. So, if you cut the line between your Blu-ray player and LCD TV and try to record the contents, you will be only able to see standard definition (SD) content at best. The encoded audio and video data will be decoded at your display device (TV or monitor) to deliver you the content “right.”
If you will be making a purchase for a device that has an HDMI port, then insist on seeing that it is compliant with HDCP.