iTunes uses the zeroconf (also known as Bonjour) service to announce and discover DAAP shares on a local subnet.
The Register speculates that Apple made this move in response to pressure from the record labels.
[3] More recent versions of iTunes also limit the number of clients to 5 unique IP addresses within a 24-hour period.
This does not affect third-party DAAP servers, and all DAAP clients without support for this feature, including iTunes itself before version 7.0, will fail to connect to an iTunes 7.0 server, receiving a '403 Forbidden' HTTP error.
The iTunes 7.0 authentication traffic analysis seem to indicate that a certificate exchange is performed to calculate the hash sent in the 'Client-DAAP-Validation' header.