RealDVD, a legal program that allows consumers to burn an unlimited number of DVDs on up to five PCs, will go on sale today at for $29.95. I interviewed RealNetworks VP of Video Product and Development Jeff Chasen in the Beet offices earlier this month, where he gave me a demonstration of the program.

The uploaded files are encrypted to prevent illegal sharing, but the five-PC rule makes it possible for users to grow their video library by uploading the DVDs of friends, or even DVDs of service like Netflix. Chasen assured me the service was lawful, citing the unsuccessful suit of Kaleidescape for its movie jukebox as a legal precedent. Andy Greenberg at Forbes explored the possible legal pitfalls of the service in more depth, and concluded that although RealDVD has a compelling fair use argument, they’re still treading relatively untested grounds.

Legal questions aside, we’re impressed with this product’s sleek interface and easy-to-use sorting function. Saving the large movie files pretty much requires the purchase of an external hard drive, but it seems worth it for what you get in return.

Kelsey Blodget, Associate Producer

UPDATE: The Motion Picture Movie Association wasted no time in making threats against the RealDVD, asking a federal court for a restraining order to stop RealNetworks from selling the product, CNET reports. RealNetworks Home Entertainment struck the first blow; the company announced this morning that it is filing suit against Hollywood studios to protect consumers’ fair-use rights with RealDVD.

The declaratory judgment will be filed against DVD Copy Control Association, Inc., Disney Enterprises, Inc., Paramount Pictures Corp., Sony Pictures Entertainment, Inc., Twentieth Century Fox Film Corp, NBC Universal, Inc., Warner Bros. Entertainment, Inc. and Viacom, Inc. in the United States District Court for the Northern District of California.

For now, the product is still available for purchase. The press release about DVD Copy Control Association’s unsuccessful suit against Kaleidescape, a similar product, can be read here. “Having lost the case once, the major studios are now trying to get a different result by going to a different court,” RealNetworks said in an official statement.

This time, the studios would have more to lose; RealDVD is available at a consumer-friendly price and could have wide appeal, whereas Kaleidescape cost over $14,000. If RealNetworks prevails in their suit, it will have huge implications for the DVD industry and the future of fair-use rights.