The basic story is this: Someone [or a group of someones] released a mod called Hot Coffee for the PC version of GTA: San Andreas. The mod, or modification allowed the player to engage in a button-pressing game to satisfy his girlfriend.
Rockstar Games, the creators of the GTA franchise replied that the modification was created...
"In violation of the software user agreement, hackers created the 'HotThis made some sense, since many PC games come with tools so users can create new scenarios, missions and in some cases entirely new games.
Coffee' modification by disassembling and then combining, recompiling and
altering the game's source code."
But Rockstar's claims seem to fly in the face of recent news. Gamespot and others have discovers that with a few minor tweaks, the PS2 version of San Andreas contains the same scenes. You can find how they did it here.
While the game is nowhere near as explicit as the video-game crusaders claim, it's cold comfort as it looks like Rockstar deliberately lied.
If you don't like others telling you what you can and can't buy, it would serve you well to watch where this story goes. I'll make sure to update when events warrant.