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I've got a region free DVD player that came that way from the factory. As much as Hollywood may cry that such machines are "illegal" they come from the factory with a menu option to turn off macrovision, region coding, etc. I am unaware of any attempt to pull such machines off the shelves or to stop their importation. Best Buy, Circuit City, and even Kmart routinely sell such systems. RCA, Sony and the like generally do not support such behavior from the factory.

Hollywood's response has been to release some DVDs with RCE (DVD Talk page on RCE); their name for a scheme that checks if a machine is "region free" (verboten in their eyes). Since I can manually set my DVD player to any region this is nothing more that a nusience (but something that would persuade me to boycott buying the American release since I would need to keep toggling my settings to play it). I have not seen any other countries embracing RCE or setting up barriers to the sale of region free players.

Some foreign DVD manufacturers offer different suplemental features or release their discs prior to the US discs. It's a global marketplace. People can buy import CDs, they should be able to buy import DVDs too.

Warner Home Video:

WHV will start a program to enhance the capabilities of the regional code specification for DVD beginning in October. This program is a response to the unauthorized practice of altering DVD video hardware players so that they bypass the region code requirements for DVD. This is happening on a more frequent basis in many territories, and retailers are openly marketing these non-complying players with names such as "region free" and "multi zone".
The Technology – The enhancement is an additional imbedded code (RCE – Regional Code Enhancement) on the DVD disc that makes the current regional coding more robust.
How It Works – In simple language, the RCE allows the disc to detect if a hardware player is region specific (as required by the CSS licensing agreement), or if it has been manufactured or altered in the market to be "region free". If the player is "region free" the RCE will not allow the disc to play the program material. It will instead display a message on the television advising the consumer that the machine is not authorized to play this disc.
The actual wording will be as follows:
THIS DVD PLAYER MAY HAVE BEEN ALTERED AND IS UNABLE TO PLAY THIS DISC
THERE IS NOTHING WRONG WITH THIS DISC DVD PLAYERS AND DISCS ARE DESIGNED TO WORK IN CERTAIN REGIONS
THIS DISC IS NOT COMPATIBLE WITH THIS PLAYER PLEASE CONTACT YOUR LOCAL RETAILER OR PLAYER MANUFACTURER FOR ADDITIONAL INFORMATION WE APOLOGIZE FOR ANY INCONVENIENCE
WHV will start applying the RCE to discs scheduled for release in the U.S. market beginning in late October. At this time, the RCE will only be applied to Region 1 versions of titles. At least one other studio (Columbia TriStar) will also be releasing discs with the RCE during the 4th quarter.
The program has two objectives. (1) Discourage the export of region 1 discs to other regions and (2) discourage the sale of DVD video hardware that has been modified to “region free”.
WHV Sales personnel should immediately begin to communicate this program to key retailers in their respective territories.
It is especially important to focus on retailers selling product online, and any account, which may be exporting products outside Region 1. With the online retailers, we must discuss the need to properly notify consumers outside the region 1 territories that the disc may not play in their player before the disc is purchased. The customer dissatisfaction and returns risk is significant if this is not done. At this time there is no plan to send out a press release on this program. This document should be used to review the program with all U.S. accounts.

And this from Columbia:

October 3, 2000 Dear Customer: Columbia TriStar Home Video will be implementing a program to enhance the capabilities of the regional code specifications for DVD product beginning in October 2000. The Regional Code Enhancement affirms Columbia’s commitment to support regional coding, which was designed to respect and adhere to each country’s respective laws and policies governing ratings, censorship, release windows and rights for home video product. The enhancement will allow the Region 1 DVD disc to check the region code of the player ensuring that the player is a non-modified region 1 specific player. If the player has been modified to be region free, the Region 1 disc will display the following message:
"This disc is intended for play on non-modified Region 1 players only. There is nothing wrong with the disc. To assure playback you should purchase or rent a disc designed specifically for your region."
Please be assured that the Regional Code Enhancement technology will not affect the consistent high quality standard, set by Columbia TriStar Home Video, for audio and video on its DVD titles. We thank you for your support and understanding in our efforts to reaffirm our commitment to regional coding as both a theatrical and video organization.

Fox reportedly had this graphic on their UK Simpsons site: