It's away the movie industry can control the release dates of a film in different parts of the world, basically. The world is divided into six regions, and the region encoding on a DVD determines which regions it will play in. Of course, there are ways around this, such as buying a DVD player that was manufactured for a different region, or one that is region-free and will play discs from any region. There are also DVD copying programs out there which can remove or modify the region coding on the copy it makes. Such programs, however, may be illegal, and you all know Nessaholics' stand on things that are illegal, right?