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No, they've invented technology that could possibly be used for that purpose. Basically the disk would only work with the first console it is placed in; you couldn't even lend it to a friend.
My gut feeling is that they won't use this because it's just impracticle. What happens if your Playstation breaks down and gets replaced under warrantee? You wouldn't be able to play any of your games.
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Sony wants you to buy new games to get more of your money. I'm pretty sure the exploding thing was sony. While it may lead to some sweet practical jokes. No one would want to buy it. Knowing my console may explode while I'm playing wants me to get the Revolution more. In an interviw (i'm pretty sure ign) nintendo said the revolution will be about as powerful as 3 or 4 gamecubes.