The Information Rights Management capabilities in Office 2003 enables a digital envelope to be put around an e-mail or Office document that limits what people can do with it (e.g. edit, copy, print, forward), when the document expires, whether the software needs to check back with the SharePoint server for the latest updates, etc.

In SharePoint Server 2007, there will be server integration with Windows Rights Management Services and the extensibility to integrate with alternative rights management systems so that policies you set on SharePoint Document Libraries on the server will be enforced even after the content has left the site.

From the ECM Blog ...

Once IRM capabilities are enabled on a SharePoint farm, list administrators can specify IRM settings on each list, document library, or InfoPath form library using the following Information Rights Management Settings page:



As you can see, a list administrator can specify a bunch of IRM settings on the document library.

When a user downloads a document from an IRM-enabled library or views the contents of a document inside her browser, SharePoint creates a rights managed version of the file and gives this copy of the document to the downloader. The downloader's IRM rights to the file match her role on the SharePoint library. So, if the downloader only has the Viewer role on the document in SharePoint, she'll have the View right in the downloaded copy. In essence, IRM rights are 'sticky' or persistent SharePoint permissions that stay with the document after it has left the server.

The downloader is the only user with access to the downloaded copy of the file, so you can think of this copy as a temporary permission contract between the downloader and the server. This helps ensure that SharePoint is the central collaboration point for the document.

When the downloader uploads the file back to the library, rights management is removed and the document is stored unencrypted on the server. This allows the content in rights managed libraries to be searched and avoids the problems associated with long term storage of encrypted content. Don't worry though; SharePoint ensures that search results are properly filtered so that users can only see items that they have permissions to at least view.

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IRM relies on Microsoft Windows Rights Management Service (RMS) technology in Microsoft Windows Server 2003 ... for more information visit the Windows RMS Web site.