Well...
 

HW Encryption isn't the only way to go:

1) Are there serial #'s in ECUs? If so, code checks that just like it checks the encryption.
2) Tie into immobilizer uniqueness?
3) CRC value off adaptation values in NVRAM: generate signature of vehicle and write that into ROM - need some kind of update method, but if you used, say throttle position, you could update a valid signature with another valid signature whenever adaptation runs.
4) Tie into instrument cluster values: e.g. program reads and keeps track of odometer reading at power up and power down and ROM won't work w/different odo reading.
5) Others?

All these are methods that keep the image in the car's ECU from working when copied. Protecting the box itself is way easier!

I've never attempted to break any of the tuners' "encryption", but some basics seem obvious:
A) The CPU has to read the code, so anyone can COPY the code.
B) Given A, you'd want some sort of handshake device w/o which the code won't run.
C) Sufficiently motivated and experienced individuals can reverse engineer and reproduce or recode to defeat B.

I don't think the average car person falls into the 'C' category. If you're worried about other "tuners" stealing and distributing your code, that's a *LOT* easier to catch and prosecute.

FWIW, in the interest of getting such a beast, I will happily "donate" my expertise in copy protection (and defeat) to any Audi tuner who's seriously interested in productizing such a device.<p>Richard
'00 A6 2.7TQM
"Turbos make torque, and torque makes fun." -Corky Bell

I think CraigB has this on his M3.