Section 1201, starting with subsection (d), contains a bunch of exceptions to copyright law. The reverse-engineering section is of particular interest.
This exception permits
circumvention, and the development of technological means for such
circumvention, by a person who has lawfully obtained a right to use a
copy of a computer program for the sole purpose of identifying and
analyzing elements of the program necessary to achieve interoperability
with other programs, to the extent that such acts are permitted under
copyright law.
So far the entertainment industry has not accepted the view that DVDs or Blu-ray discs are "a copy of a computer program", so they continue to deny that the §1201(f) exemption will protect you in this context.
Notwithstanding the provisions of subsection (a)(1)(A), a person who has lawfully obtained the right to use a copy of a computer program may circumvent a technological measure that effectively controls access to a particular portion of that program for the sole purpose of identifying and analyzing those elements of the program that are necessary to achieve interoperability of an independently created computer program with other programs, and that have not previously been readily available to the person engaging in the circumvention, to the extent any such acts of identification and analysis do not constitute infringement under this title.
That doesn't seem particularly relevant to making a Linux DVD player, not only because it only applies to computer programs as works but because it only authorizes circumvention for reverse engineering and only applies to circumvention rather than circumvention tools. I would have thought the interesting part was §1201(f)(2):
Notwithstanding the provisions of subsections (a)(2) and (b), a person may develop and employ technological means to circumvent a technological measure, or to circumvent protection afforded by a technological measure, in order to enable the identification and analysis under paragraph (1), or for the purpose of enabling interoperability of an independently created computer program with other programs, if such means are necessary to achieve such interoperability, to the extent that doing so does not constitute infringement under this title.
Why wouldn't that apply when you're independently creating a computer program (Linux DVD player/library) that needs to have interoperability with another program (DVD player microcode)?
Just a small request, if you are going to use indentation to quote a piece of text, please insert line breaks manually.
Otherwise the text is rendered as one long line, or in some cases as full width paragraphs, which make them very hard to read even on a full size monitor let alone a mobile device.
My personal preference is to italicise quoted text, but that is up to you!
off topic
EDIT - perhaps this is something that can be improved with the new UI that is slowly being rolled out, as it really shouldn't remain an issue for comment posters.
http://www.law.cornell.edu/uscode/text/17/1201
It's summarized as such:
This exception permits circumvention, and the development of technological means for such circumvention, by a person who has lawfully obtained a right to use a copy of a computer program for the sole purpose of identifying and analyzing elements of the program necessary to achieve interoperability with other programs, to the extent that such acts are permitted under copyright law.