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You can view the source on CTAN [1]. The first few lines look like this:

  % This manual is copyright (C) 1984 by the American Mathematical Society.
  % All rights are reserved!
  % The file is distributed only for people to see its examples of TeX input,
  % not for use in the preparation of books like The TeXbook.
  % Permission for any other use of this file must be obtained in writing
  % from the copyright holder and also from the publisher (Addison-Wesley).
    \errmessage{This manual is copyrighted and should not be TeXed}\repeat
  \pausing1 \input manmac
  \ifproofmode\message{Proof mode is on!}\pausing1\fi
[1] http://www.ctan.org/pkg/texbook

This is one of the things that I've always found to be a little odd --- it's one of the simplest ever DRM schemes. My theory is that Knuth put it there just to satisfy his publisher's lawyers, since otherwise he wouldn't let the source be copied freely, much less make it public. Being who he is, he could've also made it much harder to bypass. Rather clever of him, and it somewhat fits with his style.

Of course I could be wrong and he truly has quite conservative views on IP...

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