OS = Operating System. This is the main software on a computer that runs the rest of the programs. Examples being Windows 98, Windows XP, Windows Vista, DOS, Symbian (on personal organisers) etc.
DRM = Digital Rights Management. Back in the days before CD/DVD burners, ripping software, file-sharing and multimedia computers it was relatively difficult to copy music, movies and TV shows. Now it is pretty easy to copy whatever you like on to your computer. (Believe it or not currently illegal in the UK even if you are copying a CD you have already bought to your own machine). Obviously many people then share around their media to others. DRM covers a host of methods to stop this happening and to protect the rights of the copyright holders. Unfortunately, as well as preventing what most would agree to be unfair usage (making your entire media library available to the entire internet) DRM can sometimes prevent what most would consider fair usage (putting a track you have legally downloaded and paid for onto another device that you own). Also, given Microsoft's scant regard for personal privacy, there is the worry that reports could be made as to what you are playing/viewing. There is also the consideration that most copyright owners would like you to have as few rights as possible over your media, allowing them to make you pay as much and as many times as possible. So on the whole while DRM might sound like a fair idea, in practise it doesn't turn out to be fair to the consumer. On the other hand, if you don't use your machine for media it's not really a concern.