The reason that it has taken so long for Microsoft and CableLabs to come to agreement is that the cable industry simply did not believe that Media Center PC's were trustworthy when it came to protecting video content. The PC is a relatively open system, one which is easily "accessorized" by new peripherals and software. Once DVD's Content Scrambling System was cracked, the entire cable industry became very nervous about opening up their content to manipulation by PCs.
Microsoft was told to come up with a software and hardware solution that would sufficiently protect video content against piracy and unauthorized duplication. But Microsoft was concerned that such a solution would make the consumer video viewing experience rather cumbersome and unfriendly, thus being antithetical to its larger goal of pushing consumers to view video on their PCs.. Read on over at Designtechnica.