I had a quick look and it appears to be a combination of file enveloping and bad block protection.
These are tried and tested methods and will prevent what I call 'playground piracy' where friends exchange copies. This will not make you invulnerable to a pirate and the subsequent 'fixed .exe' releases.
This actually relates to a paper I read by a Swedish student called Mike Anderson about a convention he called 'Crypth'.
Crypth is a standardised script for making changes to files thus ensuring the MOD community, and by co-incidence the pirate community too, could make changes to commercial .exe files without re-releasing the exe's thus making them totally legal.
Mike's Crypth parser does not work on PII and above processors and seems to have died a death, but if the pirates got their act together it would be possible to release and sell - in shops if you like - totally legal 'CD removal' scripts. Aswell as more legitimate things such as MODs and cheats etc.
Software is quite possibly the strangest of business' to be in...
Pneumatic Dryll, Outrageous epic cleric of EQ/Xev
God made the world in 7 days, but we're still waiting for the patch.