Things got crazy in Diggville last night. If you’re unfamiliar, is a pioneering social news site that gives full editorial control to its community of users. Until last night, that is.

Things started to go bonkers when some industrious hackers finished cracking the DRM cipher that protects new HD-DVDs from being illegally copied (and played on Linux computers) and immediately began spreading the critical 16-digit hexadecimal code around the Web. This should have been a surprise to no one, considering practically every copyright-protection scheme of recent times has eventually fallen.

Apparently, the only people who were surprised were the lobbyists supporting the HD-DVD DRM technology, a company called Advanced Access Content System Licensing Administrator. The AACS-LA began a blanket cease-and-desist campaign, sending out threatening notices to any site on which the cracked hex code could be found. Even Google received a cease-and-desist for the number simply appearing within search results. All this, even though the number being so frantically protected is akin to the blueprint for building a house—the code itself is useless to the common user, and only helps those with the expertise to write a software application that uses the code to play or rip copyrighted HD-DVDs.

Anyway, the folks at Digg were freaked out enough to start deleting any link submissions or comments regarding the whole affair. This in turn got their users whipped into quite a frenzy; the number started appearing in uncharacteristic places (such as in YouTube videos and fake Web site URLs), all of which received massive attention. Finally, late last night, Digg’s founder, Kevin Rose, decided to damn the torpedoes and give the users what they wanted, lifting the ban on stories containing the code and seemingly risking the future of the site in the process.

Something tells me, though, that the interval between the initial ban and Rose’s turnaround was just enough time for Digg’s lawyers to realize that they were probably safe. Or that they were willing to fight the good fight and make an intellectual-property test case out of it. Nevertheless, pretty interesting stuff from Web 2.0-land. —John Mahoney