In real life, this would mean that next generation "Tivos" wouldn't be able to record shows or movies that broadcasters think is too valuable for them to allow users to time-shift or record -- even for personal purposes. Obviously, technology companies oppose this ruling and claim -- very reasonably, actually -- that if, or when, someone hacks the copy protection, FCC would then require them to change their products again to implement further copy protection methods, until those get cracked as well. Consumer groups oppose the idea as well, since it kinda kills the idea of digital VCR totally -- system can't determine whether user is going to store the movie/show only for watching it after his/her holiday or does the user have plans to distribute the recording over the P2P networks.
And to thwart the idea further, despite broadcast flag available or not, old analog recorders, such as current generation of "Tivos" and other PVR systems and good old VCRs could still record the shows -- only in current NTSC resolution, but it would still be possible.
Source: MSNBC