It appears as though Apple's FairPlay Digital Rights Management (DRM) for iBooks has been cracked, allowing iBooks to work on non-iOS ePub readers. MobileRead Forums reports:

It is now possible to remove the DRM from epub ebooks bought in Apple's iBooks store. "Brahms", has recently released a new version, 3.3, of his Requiem software, which has been able to remove DRM from music and videos bought in the iTunes Music Store for a long time. This new version can also remove the DRM from Apple's epub format ebooks.

DRM cracking has been a long standing problem for Apple and other platform owners, originally with iTunes music and video content, later with App Store apps. While Apple dropped FairPlay DRM from iTunes music in 2009, it's remained in place for everything else.

DRM protects authors and other creators from illegal distribution of their content (we all like to get paid for the work we do), though when poorly thought out or overzealously implemented, it can also stop legitimate customers from enjoying the content they purchased.

FairPlay tends to be pretty liberal, allowing up to 5 Mac or Windows PCs to be authorized for iTunes content, and up to 10 iOS devices, including iPhone, iPod touch, iPad, and Apple TV to access services like iTunes Match.

It's likely Apple is investigating the issue and will have a FairPlay fix put into place via a software update for iTunes and the iBookstore in the near future, but it's a cat-and-mouse game so we probably haven't heard the last of it.

Source: MobileRead Forums via CNET