Wiki claims that AACS is mandatory on BD.
BDAV and BDMV are essentially file structures.
AACS is mandatory on all playback devices and software and for authoring BDMV. Adobe's Encore and Roxio's DVDit HD programs both author BDMV complete with interactive menus with AACS protection.
For consumer use, the AACS license is paid by the software company and disc OEM, not the user.
BDAV refers to either the transport stream format used for all Blu-ray content, or the plain format intended for home video with no interactivity.
BDAV is what consumers will normally be using for consumer-created content. It also provides basic menu support. However, it's up to each individual Blu-ray player manufacturer to implement BDAV.
Sony's PlayStation 3 and most other Blu-ray players support both BDAV and BDMV on BD-R and BD-RE (Rewritable) via software upgrades.
BDAV and BDMV should not be confused with BDCMF. BDCMF is a special format comprised of BDMV (which itself contains BDAV) for replicating facilities. BDCMF requires AACS licenses per title, and special software to author such as Sony's BluePrint.
In short:
BDAV (No AACS protection) is for consumer software packages like iDVD, Ulead MovieFactory, Roxio's MyDVD, etc
BDMV (Currently No AACS protection, Eventually will support Basic AACS protection) is for prosumer and professional software packages like Adobe Encore, Roxio's DVDIt! HD and Apple's DVD Studio Pro
BDCMF (Expanded AACS and BD+ protection) is for large-scale commercial software packages like Sony's BluePrint
Update: It gets even more complicated.
Apparently, the Blu-ray Disc Association never intended consumers to use BDMV to author onto BD-R or BD-RE because of piracy concerns. That's why they created BDAV. However, they allowed manufacturers to support BDMV on BD-R for a short period of time (internal purposes, demos, promotional purposes, etc).
But BDA relented and have started allowing manufacturers to support both AACS-encrypted and non-encrypted BDMV discs on their players as an option.
Therefore, if you have a Blu-ray player that supports AACS-enabled Version 3.0 BD-R or BD-RE discs, your player also supports Non-DRMed Version 1.x or 2.0 BD-R or BD-RE discs.
The 1.x and 2.0 discs are what's currently available on the market. The AACS encryption is tied to the disc and activated by the software package. For example, if you own Adobe Encore and put in a Version 2.0 BD-R that doesn't support AACS, Encore will recognize this and burn appropriately.