it should work, but i have never tried it. the only way around that would be to somehow "scramble" the signal and require that all new CDs must be played on new CD players with a decoder and special speakers tha use some kind of phase shifting

that way the signal actually going to the line out would not be understandable without being decrypted.. which, for obvious reasons, will not happen. of course, it would be a whole week ro two before someone figured out the decryption and made it public.... but hey... let them try

i can't possibly see a way to make them completely copy-proof unless they do try that idea they had that each CD comes ennclosed in a cdplayer (no lineout, though i assume it has headphone jack) and opening the player destroys the disc.. of course, the size of the player would pretty much make the whole idea behind a CD moot. and a headphone jack is all the output you need.
wouldn't it be nice if they could finally catch up with the times and get rid of CDs and instead put the music on digital media similar to the pocket HDDs that are already out. they wouldn't need much space and make them to plug intoa USB port to be played directly. it would be prety easy to make a player that has just a PIC chip in it that is programmed to detect when a device is in the USB port (all devices must ID themselves when plugged in) then just autoload a program to decode and play the music. a small LCD and a headphone jack are all that's needed.. hell.. anyone could make one of these come to think of it.... as long as they could program a PIC (BS2, OOPIC, BX, any should work) and if they were to use MP3 to ncode the discs it would be even easier, smaller and better quality..
but enough dreaming, RIAA is stuck in the stone age and will take a complete change of power there to get anything like this to be a reality i fear.