It will be interesting to see how this plays out when it comes to Google (with their search engine, they do link to copyright protected content), Youtube (despite the court ruling in favor of Youtube), Rapidshare and many others.
Also, since this blocking appears to happen just through changing the DNS entries, I think now is a VERY good time to invest into domains that are not in control of the US. (Which is sad in a way, because .com has this feeling of being "original" and "authentic".) Also, US-based hosting may not be a good idea in the long run.
In any event, this rings many alarm bells with me. Could well be that the Internet that we thought we know is coming to an end. It does not surprise me though, since the potential of the Net (for revealing inconvenient truths) is far too big to be ignored any longer by the governments of the world.