I've been programming for iPhone and iOS since the sdk was released. The first app I developed was the highly successful iBeer, and I have many more apps currently available in the App Store. I've incorporated audio and video players in many of my apps, and many incorporating server calls. I would use a remote procedure call to verify the user's identity and securely feed the file from an otherwise inaccessible folder on the server. On the user's device we would present a player window with standard controls of play, pause, stop, rewind, and volume. As the player is embedded in our program there would be no other possible access of the file, thus copying is prevented. Let me know if you would like to discuss further.
Thanks,
Chris Howell
etherVision, inc.