We've been talking about TOS/EULAs for quite a long time here at Terra Nova. Here's a fairly obvious theory about these agreements, borrowed from Jeremy Bentham's felicfic calculus:
1) If TOS/EULA provisions make both the designers and participants in virtual worlds on the whole better off (while making third parties no worse off), they're generally good, and we should support them.
2) If TOS/EULA terms make all collective interests generally worse off, they're bad, and we should oppose them.
So, here are the thoughts of Public Knowledge and the EFF on the copyright claims in the MDY case. In short they seem to say: sure, cheating is bad, but using the power of copyright law to enforce TOS/EULA contractual agreements will lead to bad results for software users generally.
This is indeed a very interesting case.