Maybe someone from AMD can elaborate on this without revealing company or NDA secrets.
1. What exactly does the most recent AMD video firmware do? Is it code or does it just kind of map the open source APIs, or primitive functions, to hardware logic points?
2. Is there any DRM imposed on videos that don't taditionally have DRM on them, like for example on Youtube videos that might use UVD engine at the whim of Google, etc?
IIRC it basically sets up and controls the low level hardware blocks which do the actual decoding operations. One of those things that needs to happen more quickly than you could do with driver code (other than maybe dedicating a CPU core to it), so it's done on chip.
No added DRM (in fact no support for DRM at all). The UVD capabilities are exposed via VDPAU API to higher level software.