So has anyone used D2D recently to buy a game not marked as DRM-free?
I would like to know how their activation system works now. A few years ago, you would download the game and D2D's custom SecuROM would pop up and ask you to activate your purchase (separate from DRM installed by publishers, if I recall).
It would help to know if they have made the system more consumer-friendly, as I have had to email their support department several times asking for my activations to be freed for additional installs.

Outside of the DRM-free selections, some games have it and others don't, and you can't tell until you've bought the game. For example, I did not have to authenticate Splinter Cell.
For the games that do use it, yes, this is how it works. After you install the game and try to run it for the first time, it asks for your serial key and connects to D2D to activate it. I don't know how or whether they still limit your activations, but I don't expect that it has changed much.

All the games I'm interested in wasting money on is unavailable in my location.

I'll take the opportunity to ask this.
I have bought games from both storefronts on the same D2D account. The ones i bough from the US storefront were marked as 'available worldwide' and the ones i got from the UK storefront had Portugal in the list of countries from where the game could be purchased.
Is this a no-no in an way ?
I'm assuming it's not a problem since all games show up on my account regardless of origin, but some reassurance would be nice just the same.

Just as Mentalepsy said, which is why I only buy games from them that I don't care too much about or that are killer deals (such as Moount and Blade for 8 bucks).

Not too interested in anything on sale this week, but potential woe to my bank account when they get to Week 5 (War)...

All the games I'm interested in wasting money on is unavailable in my location.
This. Which is why D2D is one of my least used services. Even with this sale, I think there are only 2 confirmed titles that are available worldwide and 3 more which may be (but the store pages does not list either way). Mind you, I'm not interested in any of the titles currently on sale.
I notice D2D were doing the false advertising thing -- that old favourite of Steam -- (especially for the UK side) by claiming that it's a total of 50 games on sale; the UK site only lists 6 for this batch and it's unlikely that later batches will make up the count. But to give them credit, they have now changed the wording for the UK site. They no longer make any claim on the number of games actually available in the sale.

Is it possible to gift D2D games to those who live in the "banned" countries, like Steam does? If so, I'd love it if someone gifted me Warhammer 40K while it's still $5.

I heard using proxies works too. But meh, I can't be bothered to go through all those loops.

Wow. The region restriction is the biggest pile of bullcrap I've ever experienced... There goes my cheap CoJ and Civ4. :(
EDIT: Hmm... even UK version of D2D says my country is restricted. Heck, no money for them, then.

Bad news, from D2D support:
Also, these activation limits do not reset over time. According to the support rep, after using the activations, users must contact D2D support.
There are few things more annoying than waiting 24 hours to play a game you've purchased because you are waiting for technical support to reset your licenses.