i'm not sure what happens if you throw the AAC files onto a PC, but i did notice that the little Finder preview ( in column view ) would playback my purchased songs, and the file comment said "Protected." I then copied my files to my iBook from the PowerMac and they played, although my iTunes was logged in as the same username.

fwiw, i'm pretty into digging through the Store and finding those single tracks from yesteryear and only having to pay $.99 instead of 20 bucks for some sh*tty Greatest Hits album for one track.