Yeah, it's a USB "dongle" that some software companies require to prevent unauthorized copying of their program. I forget how many of my programs use the iLok (some of Digidesign and all of Waves and Native Instruments, maybe Ivory, too), but I've had one for probably five years for copy protection. If the program requires it, it doesn't matter whether you want to use it or not. You'll have to have one.

I also just bought a Synchrosoft dongle for my Aurtura Minimoog program, so now I have two (I actually have a different brand left over from an old version of Logic Pro, which isn't needed for LP8).

I much prefer it over the "challenge-response" type of copy protection. When I move to a new computer, I simply re-install the software and plug in the iLok. If your hard disk crashes at some point (they all do), again, you simply re-install the software and your iLok is still good. It holds the software licenses, so it can get pretty valuable over time (mine's probably worth $3-4k in software licenses that I own).

With the challenge-response systems, you'll have to call up (some are automated on-line systems) each manufacturer and get a new "code" to activate the product. Most are pretty cool about it if this only happens every couple of years, but it's still not as convenient for me.

The downside is that you can lose your iLok or it can get stolen or broken. However, with iLok, you can install the software on a desktop AND a laptop and switch the iLok between them.

Because there is so much software piracy, the manufacturers have to do something and iLok is one of the best protections they can have. Like ANY copy protection, it's a bit of a PITA for regular users.