Be careful, iTunes apparently isn't all that smart about video files either. I had a bunch of shorter video files (all saved as mp4, but playable on my iPod) turn up unplayable in iTunes this week. The files still play in Quicktime Pro, so the problem is solely that iTunes can't grok something in the generic mp4 container format anymore. When I click on the files in iTunes (or in the finder for QuickLook) I only get the audio portion of the file. The video portion and the associated artwork are "missing." But since the files still play just fine in Quicktime, it seems to be more of a decoding problem. I've noticed that a lot of things have been getting more and more braindead the last few releases of the system -- which is why I'm still running Snow Leopard instead of Lion. I don't feel like turning my big, souped up desktop machine into a giant iPad without a touch screen.
I've also noticed a number of older mp3s that turn up with the duration and bit fields wiped, making them unplayable.
As for ripping copies of media you've already paid for: I thought that portion of the DCRM had been challenged on the same grounds that Sony vs Betamax has succesfully been used a number of times to allow consumers to pay for a movie or music album ONCE, rather than for each type of media they wish to keep it for private use.
This is as bad as finding out I'd lost an entire directory of artwork when I migrated from my old machine to this one. No clue where the files went, they just didn't make it to this machine's disks. It's a good thing I had multiple backups of the machine that died (live backups, not the files that TimeMachine makes), or I'd have been totally *******.
At the moment, one could successfully argue that the only safe and reliable way to keep digital copies of CDs that one has already paid for is by ripping your own copies and running iTunes with the Genius, iCloud, and iMatch functions turned off. And not allowing iTunes to reorganize the music directory or download artwork (I've gotten some really whacked "art" for some albums out of the iTunes database). If you're interested in privacy, turning off all the outside connections is a pretty good idea anyway.
I'll say it again: iTunes is rapidly becoming more and more like the Adobe products. It's nearly impossible to turn off Adobe's "automatic" updates, but I would never install a major upgrade without waiting a while, and doing a lot of reading to find out what's likely to go wrong first. Long ago, it was possible to just let AutoUpdate safely install anything Apple sent out, but that time is long past at this point. And since I still have my 1st Gen iPod stored away on a shelf here, I can say that the majority of the problems I've encountered over the years have been with the **** iTunes software, not the various iPod or iDock hardware we've owned.