Actually the drm bs is dead except if you had video/movie content on your console. If you send your console in for repairs and they replace msft is now transferring the drm to the new machine so you don't have to be on live to play anymore and also MSFT now allows you to assign/consolodate the rights of all your downloadable content to one console once a year (So you can transfer the drm from say a premium to an elite etc)
Unfortunately, though they are suppose to transfer the licenses when replacing a system, they don't. I got my system back a few weeks ago, and they tell you that the licenses have been transfered, and that you only have to redownload the content. It didn't work, though, so I had to use the web-based tool you mentioned, which, as you say, is only valid once a year.