Some discs from Fox, Buena Vista/Touchstone/Miramax, MGM/Universal, Polygram, and Columbia TriStar contain program code that checks for the proper region setting in the player. In late 2000, Warner Bros. began using the same active region code checking that other studios had been using for over a year. They called it "region code enhancement" (RCE, also known as REA), and it received much publicity. RCE was first added to discs such as The Patriot and Charlie's Angels. "Smart discs" with active region checking won't play on code-free players that are set for all regions (FFh), but they can be played on manual code-switchable players that allow you to change the region using the remote control. They may not work on auto-switching players that recognize and match the disc region. (It depends on the default region setting of the player. An RCE disc has all its region flags set so that the player doesn't know which one to switch to, then it queries the player for the region setting and aborts if it's the wrong one. A default player setting of region 1 will fool RCE discs from region 1. Playing a region 1 disc for a few seconds will set most auto-switching players to region 1 and allow them to play an RCE disc.) When an RCE disc detects the wrong region or an all-region player, it will usually put up a message saying that the player may have been altered and that the disc is not compatible with the player
-taken from Jim Taylor's Official DVD FAQ