It's a brief read at About.com, but the idea is that the issue is that there's a large wait time to see DVDs produced in various region codes - to the point of 6 months! 

All that time means that someone who'd usually have to wait that time relies on pirated copies in AVI/MPEG/etc formats, or they just bust the DVD player so it pays no attention to the codes.

Personally I think doing such would do little in the war on piracy.  Cams (recording a movie on a camcorder, which were made illegal in California recently) and screener rips are a far greater concern then region codes...