There's a problem that I can see here. You're only focused on what you can do to protect "the intellectual property", but not how you can make it seamless for the users.

There are two markets where the reaction to f.ex a dongle would be radically different. There's the professional market, where software such as 3d studio etc has used dongles to varying degrees of success, but where it probably would be tolerated since it'd be one of 5 pieces of software used on the office PC. And then there's the private market, where convenience is more and more important, as our daily lives get more and more hectic.

I can't say much for the professional market, as I don't use software such as PS/3ds/autocad etc, but I can say that the private market is probably NOT going to accept stuff such as dongles. Someone else has already pointed out one problem with USB dongles, and that is that it won't last forever. I also think having to use a dongle for watching a movie or playing a game would be massively annoying, to the point where I just wouldn't bother. Imagine having 100 games with a dongle each. Having to keep the CD/DVD in the drive is already enough of an annoyance.

If there's code on the dongle, that can be copied and hacked into the main .exe somehow, or emulated. If there's a driver-based DRM system, that can be hacked out of the main .exe. Normal people might not be able to do so, but there are plenty of people who can, and will, do so. And publish the hacks afterwards. This is true no matter what you do, and this has been shown time and time again to be true. Everyone in the software industry knows this, yet they insist on trying to think up more and more radical methods to stop this from happening.

My main point is, however, that you can't just think "how can I stop people from copying my software", you must also think "how can I stop sufficient amounts of people from copying my software, while still not pissing off enough people with annoying DRM systems so they'll just find other things to do with their time and money".

The reason I'm saying this is, the gaming industry has lately made inroads into DRM systems which are so intrusive that it's just too much, so much so I had to write an open letter to the gaming industry (or more specifically, games publishers, since they're the ones putting DRM on the games). I believe this doesn't go just for the gaming industry, however, but the whole entertainment industry as a whole.

And after googling about a bit, I see that I'm far from the only one thinking that things are becoming too ridiculous, and they are /not buying/, simply because they are sick of the DRM.