quoted from iLounge
Apple is using lock-out chips to control third-party video accessory development and effectively preventing older, less expensive accessories from competing against Apple products. By including one of these chips in each of these new, expensive accessories, and requiring that the new iPods communicate with the chips in order to play back video, Apple has effectively created a hidden "video-out tax" on both iPod accessory consumers and third-party manufacturers-you literally must buy new chip-inclusive items if you want to see your new iPod's video on a separate display. For that reason, and though we recognize that iPod and iPhone owners may not be able to find less expensive alternatives to these three accessories, we cannot in good conscience recommend that you purchase them.