I have not studied the letter of the law in the DMCA, but here is what reads in our (Aussie) copyright act (found
here).
I'll note that there are three sections to the act that relate to the circumvention of DRM - the first is general (personal) circumvention, the second is a (hardware or software) device for circumvention, and the third is a circumvention service, all are defined
here.
The letter of the law in the AU copyright act states that regional-lockout for game consoles and movie playing devices is not included in the definition of "technological protection measure", thus making circumventing these irrevocably legal. However, it does not say that other devices such as music devices can't include a form of regional lockout that will be protected under the legislation "protecting" the circumvention of TPMs (DRM). However, one would naturally assume that breaking said restrictions would not constitute an infringement.
The DMCA, as I understand it, does not have these exceptions, and so even the act of breaking regional-lockout (even if the CSS or AACS encryption is unaltered) is illegal. That's why in the USA you can't walk into Walmart and buy a region-free player off the shelf.
With this said, the law strikes a fine large "undefined" line, in reading
this part of the act that relates to the sale of anti-DRM related devices; it does appear that selling both AnyDVD and Modchips (within AU) is legal; provided the product is intended to be used with legal non-infringing copies of the work (for example, imported products but not burnt "back-up" products - or to break HDCP/ICT, etc).
I do agree, that it is unlikely you'd be prosecuted - however the MPAA and the RIAA have successfully prosecuted US citizens for simply downloading copyrighted content; something that has never happened in AU and probably never will. So it isn't outside the realm of possibility they'll go after US citizens for merely breaking DRM. Here's a thought - imagine you own a legal copy of Windows XP - but instead of installing that copy, you use your workplace's volume copy and illegally install that as to circumvent "product activation". Should Microsoft be allowed to sue you for copyright infringement - since you do own essentially-the-same product (only the DRM-crippled version)?