Most e-book-publisher platforms have DRM built into the total solution: On the publisher's side, creating and packaging e-books, and on the consumer's side, the software used to read the e-books has DRM built in.
Before, DRM used to be a separate category of software, but now you're finding it bundled into entire publishing solutions. The consumer doesn't even know it's there, but if they're using Mobipocket, Microsoft Reader or Adobe Reader, there is DRM technology built into it. E-periodicals and legitimate music download services (such as iTunes or Napster) are all based on the same idea. You download a piece of software to play music or look at a publication, and there is DRM built into the software.
4. How does it actually work? Is it like a copyright notice in a book in that it's just a notice of the rights?
The distinction between copyright and DRM is that copyright gives the user a set of rights and gives the publisher scope to prosecute the user if they do something to violate those rights. So, if someone is making unauthorized copies of a book, you call a lawyer and sue them. It's expensive and takes a while.
What scares publishers is that the act of making unauthorized copies becomes trivially cheap and easy to do online—more so than physical books. So what DRM does is, instead of relying on the legal system to enforce copyright, it relies on technology to enforce copyright up front. It encrypts the content and only lets you look at it with the proper credentials or for a set period of time.
5. Do most publishers you encounter have a plan in place to address digital rights management?
Most publishers do not do a good job of this at all. Most of them treat rights properties as back-office overhead, and the processes they use to deal with them are ad hoc and inefficient.