Wrong, hacking iTunes and not using supported methods breaks the license agreement for using iTunes.
Palm is not hacking iTunes. They did not enter into a license agreement.
Also I am pretty sure Palm is able to do this using proprietary knowledge of iTunes taken from former Apple engineers, too which is illegal.
If they did, that would be illegal. However, it has been suggested that they likely reverse engineered the protocols in a clean room without use of proprietary information from former Apple employees.
...Except that tricking iTunes into thinking it's a iPod is still the only way to play DRM'd iTunes music.
Palm's trick to allow iPod syncing does not allow them to play DRM''d music.
VERY good call. Thanks for pointing that out.
Except that it was wrong.
As far as I know (not a lawyer) "License Agreements" have no real legal authority, and unless they signed a "Non-complete clause" (which obviously they didn't), there's nothing Apple can really do preventing former Apple engineers from performing their job at a new company., unless they actually want to take it to court and risk having their EULA ruled invalid. I really don't think this iPod+iTunes thing really wants to go to court.
Former Apple employees cannot share proprietary knowledge with their new employer regardless of any non-compete clause.