So if it requires connecting to a remote server every time you want to install it, then just how is it fundamentally different from every other remote activation type of DRM out there? As I mentioned earlier the concern with any remote activation DRM is that if the user is unable to access the server for any reason then they are SOL, and from the information you provided it sounds like GOO does absolutely nothing to mitigate this concern.

BAMPH! Encore has distributed such titles as Panda Antivirus and Fate Undiscovered Realms... The game at least is DRM free with a loader than can work online or off with no need to ever have an internet connection. IF, Torchlight follows that ideal then we could see a simple perma KEY serial unlocker or nothing at all.

How often do *you* install your games? I have installed ONE title more than twice. ONE.
Goo is infinitely superior to Steam, since FIRST off, it doens't have an account that takes master status, and can result in you losing access to your titles. Secondly, Goo has the front-end to allow future selling of titles between users.
Also, you only have to use Goo ONCE per install. Goo is obviously the best choice for publishers who want to deliver newer titles to the digital market without worrying about piracy. GOG is for games which largely arn't profitable anymore, Goo is the answer for people who don't mind giving up moderate rights in return for having their game available digitally, and potentially allow them to resale the game.
I would like to see a perhaps an option to register the game to both your email AND home phone number. At least that way, you can install it if the net is down.

I'm probably averaging around 3-4 times per game (some games fewer, some many more), but then I'm the type of person who likes to go back and replay a good game 5+ years after I initially bought it (which is often after the developer has gone tits up or ceased all support for the game).
I'd consider Steam to present the greatest number of concerns when it comes to remote activation, due to the frequency with which the server must be contact as well as the fact that it serves as a single point of failure for all games purchased through it. So while saying GOO is superior to Steam is a statement I can agree with, it's setting the bar pretty low. As for resale of games, while the functionality for this has often been touted with regard to GOO as far as I'm aware it hasn't actually been implemented yet for any titles (please correct me if you have more recent information), so listing that as a benefit seems a bit... premature.
Just like titles that use remote activation on Gamersgate, Direct2Drive, many smaller digital distributors, as well as the various flavors of Securom, TAGES, etc that use remote activation. Again, I'm not really seeing the key difference between GOO and these existing forms of DRM.
Ah-ha-ha... ha-ha... ha.... wooo. That's a good one. Might want to put down that cool-aid though, doesn't seem to be doing much for you. Also might want to spend 5 seconds on Google to see just how effective GOO was in preventing Majesty 2 from being pirated. Protip: if ever you find yourself arguing that any kind of DRM prevents piracy it's time to step back and take a long, hard look at just where your thought process got so far off track.
As is pretty much every other digital distribution service that utilizes remote authentication for installs. Resale seems to be the only thing new GOO brings to the table, and seeing how currently it hasn't actually brought that to the table... well, hopefully you're getting an idea on why I don't exactly see GOO as any kind of step forward.

I've only been using Steam since about July but I'm a fairly heavy gamer and I can count on one hand the number of times the server has conked out on me and even then it's usually a simple matter of restarting Steam.
Now, I do understand why you might have an aversion to owning multiple titles on Steam but I don't see why you can't just try the demo on Steam. I could very well be wrong but I don't think it is as invasive as some other more nefarious forms of DRM out there that royally screw up your system. But fair enough, my goal certainly isn't to convince people to use Steam just to give some minor anecdotal evidence that -- at least for this user -- I haven't had any problems with the service.

Mostly it's because I'm lazy so installing Steam and creating a Steam account is more effort than I'm willing to go through just try a demo.

This is obviously not good (though if users aren't receiving their key then that's not a problem with the DRM software in itself, but the sales system. The key is in the receipt), But these admittedly very real problems doesn't have anything to do with the "omg! limited activations"-thing that some people get so worked up about.
Remember that almost all online-distributed games for the PC (outside of Steam) use activation systems where you register your key to play. This is basically how the business concept have worked for most of this decade (often with games that are free to play for an hour but then needs to be unlocked). It's naive and almost unfair to expect anything else from Torchlight. Yes, World of Goo and a few other high profile games have gone DRM free, but this is a recent trend and one that I doubt will last.

The game is out now. Not sure if it has been posted in this thread already...

And it's pretty damn awesome. Not sure if it has been posted in this thread already.

Is it naive and almost unfair to expect Torchlight to not use a more restrictive DRM than most of its competition? Honestly, I doubt most people would complain if it used Steam or any other non-limited activation service. Well, people would, but those are the people who complain that Left 4 Dead used Steam.
And honestly, what pisses me off is that they effectively said "We are like limited activation Securom, but we aren't a virus. So that means you should love us". And as hilarious as that is, it is sad that people actually seem to be okay with this.
And honestly, I don't mind the activation model system, IF it has a strong system backing it. I actually love Steam and Impulse because they have an entire infrastructure designed around making sure I can activate my games. Yeah, Steam gets annoying with the needing to run the client (which is a problem if you really are on the low end of the sys reqs for a game), but I really don't care enough to bitch about that. And it provides me with an easy way to reinstall games. But that is just it, it lets me reinstall games.
What I do see a problem with is the limited activation model.
What happens if I have to reformat? Fun fact: It took me three years to beat Deus Ex. Why? Every time I got in the mood for it, my system went kaput. If I had had to deal with limited activations, I might never have even gotten to Hong Kong.
What happens if I run out of hard drive space? I realize that I should really just grow a pair and buy a 1 TB drive, but that will still be another activation. And as much as I love playing game X every few weeks, I am NOT reinstalling Neverwinter Nights ever again (god I hate that installer). So there is an activation every few weeks/every few months.
What happens if I want to replay the game in a few years? I realize that the activation model inherently puts a risk to that, but I can tolerate that. But I shouldn't have to keep a notebook with all the information I will need to contact tech support to get another activation.
That is why I love talking about DRM. The people who go crazy about Staem or Securom still seem to love Impulse and a lot of indie dev teams. Hell, I remember when people kept touting how Stardock didn't use DRM for GalCiv 2. What people forgot to mention was that you pretty much had to use Impulse to get patches for it...
Hell, I honestly believe that is the best DRM model, if only because it tricks people into not whining. And gives me an opportunity to laugh at the people who don't realize that it is a DRM model in and of itself.

Fair enough, but then again Securom wasn't too bad in itself. The same is true with limited activations. When publishers limits us to three installs, I understand why people complain. When they give us ten... not so much.

Honestly, I don't mind activation model Seucrom too much, when it is an infinite activation system. Securom has been around long enough that I (effectively) trust them.
But even ten activations is still not all that much, especially when you consider that this is a relatively lightweight indie-esque game.
Let's say you are like me, and you have a desktop and a laptop. You might even play the game on both. That is two activations alone. Then you have to consider things like reinstalls, the chance for patches that bugger the game up (they happen...), and the like. That can eat into them fast. And this game supports modding, right? Assume at least a few reinstalls because of that alone.
And then you have to consider how woefully under-equipped they seem to be. The DRM is from a relatively no-name company (I never heard of them), and the studio is comparatively small. At least with EA you have a very large tech support center to get your activations back.
And, if anything, ten activations might be worse. With 3, you are always aware that you will run out and remember what to do (call the tech support number in the manual). With 10, by the time you run out, you will have to google around to find all the appropriate contact info.

I'll agree that the vast majority will never even come close to hitting the 10 activation limit. My own issue with it was not the limit on activations, but simply that there was a remote activation system used, for reasons I've already stated.
Personally I'm simply holding Torchlight to the same standard against which I hold every game: is it worth the price being asked? The use of DRM systems that have a non-trivial chance of making me unable to play the game at some point in the future decrease the price I'm willing to pay.

Torchlight is likely getting a disc release in Jan 2010 that possibly might have ZERO DRM, which has been talked about on their forums.