The difference (when the game has no DRM) lies in the fact that it's not a loan as such, since your friend still has the game afterwards. It's like if you loaned him a book, and he photocopied the entire thing (deliberate awkward old-school example here), or you loaned him a CD and he burned a copy of it, or ripped it to MP3. It's not a loan, since we're not talking about something moving from one place to another and back again, but one thing multiplying into more copies of itself.

Assuming of course that everyone who borrows a GOG game will keep it forever and ever, which is hardly a stretch from just letting the guy borrow the game whenever he wants to. Multiple copies exist if he or she borrows a physical copy and uses a no-CD patch in order to play. & c.

If you use a no-cd patch, then the game has no DRM. And yes, it's exactly the same. Your point?

My point is and likely will remain unseen by selective crusaders. -_-

That doesn't make it any less wrong.

If you install the game on the thumb drive and it's your only installation of it, I think it's okay to go to a friend and show it to him or play it at his place.
As far as the rest goes, it's all illegal.
In most cases you're not even allowed to have it installed on more than 1 computer.

There might be more than one then, I'm talking about Captain Buttoneyes the fight-for-the-little-guy lawyer by day and superhero by night (and during breaks when necessary). Only man in history to defeat both the cybernetic demon donkey army of the evil King Xorgnax AND the RIAA in one day!
You know, I've seen TV shows with less plot than that and thats rather scary...
Also, the thread is raising the question of ethics rather than of law so any mention of stuff being illegal isn't really relevant. In my opinion, if one copy of the software is bought then one copy of the software can be used at a time, the number of places its installed or, to a lesser degree, the number of people who have access doesn't really matter as long as it's used sequentially rather than simultaneously.
Any discussion of ethics should really be framed around one of the 5 major frameworks
ETHICAL RELATIVISM - No principles are universally valid. All moral principles are valid relative to cultural tastes. The rules of the society serve as a standard.
DIVINE COMMAND THEORY - Moral standards depend on God who is all-knowing. Any act that conforms to the law of God is right; an act that breaks God's law is wrong.
UTILITARIANISM - Actions are judged right or wrong solely by their consequences. Right actions are those that produce the greatest balance of happiness over unhappiness. Each person's happiness is equally important.
DEONTOLOGY - Emphasis is on moral rules and duty. If not willing for everyone to follow the rule, then it is not morally permissible. Emphasis on autonomy, justice and kind acts. People treated as ends, never means.
VIRTUE ETHICS - Morals are internal. It seeks to produce good people who act well out of spontaneous goodness. It emphasizes living well and achieving excellence.
My only problem with those has always been the Divine Command Theory since any form of any god's word would be spoken by man then it just becomes another set of laws & not really relevant. Also I have a hard time in conforming to the wishes of anything less plausible than those sparkly energy creatures from the original Star Trek

The legal situation is quite frankly a mess. In some countries you're allowed to return something if you can't accept the EULA, not so in others. Sometimes software is seen as a material item that you can resell, sometimes it's seen as just a placeholder for a contract. Depending on this and many other things you may have rights that go well beyond what the DRM allows you to do, but which you cannot enjoy without breaking the DRM (which may or may not be illegal, depending on where you live) or going to court.
Then there are the problems with how DRM itself works. If it works only within the application it is supposed to protect, that's quite alright, however the majority of DRM systems install themselved at the system level, often without notice and even when the app is not running or has been removed in the meantime. In my opinion that's am attempt to hack my PC, but that doesn't help me unless I'm willing to go to court over it.
DRM often lives in a legal greyarea, employing techniques that are more commonly associated with viruses than with anything else. DRM plays police and judge, without trial or jury.
As for copying. The situation is complex. Especially when a material item is involved, however in most cases, software is seen as a contract so all rights to use the software apply to your person, no matter where you are. You can install a game on 50 computers, as long as it's just you playing. However the contract may sometimes specify other limitations, like the number of CPUs or amount of data to be processed by a single license.

Thats invariably only the backend half of client/server software though, most people are unlikely to have to deal with that, CALs and the debate of whether to get per seat or per machine licences

I know for a fact that in my school, a lot of people I know have Steam accounts. So what my friends do is they share their accounts, allowing others to use their login credentials to download and play TF2. This is definitely violating the ToS, and these tossers (clever, eh?) don't know, because what 14 year old reads the Terms of Service? I think that it's also due to the lack of education about this stuff.

That is a clear violation of Steam's ToS, something they have actually banned accounts for many times in the past. If they get caught, they can say goodbye to pretty much all their multiplayer Steam games.

Since the legality of the situation is complex, something that I don't care all that much about, and since the OP question was about the ethics of the situation, here's my completely biased, arbitrary, and subjective opinion:
You should know your friend fairly well. If you know that when you "loan" him the game he'll play it, either like it in which case he'll quickly buy his own copy, or not like it in which case he'll quickly delete the copy you gave him, then everything is just fine. If he's likely to simply keep using the copy you made for him then it's not alright. If the copy only remains on his computer for as long as you are at his house then things are also just fine. Simple as that.

Let's keep this out of the discussion, as it has nothing whatsoever to do with ethics. Unless, of course, you accept that I am God, then this is definitely the best one :-D
It would be hard to argue about this anyway. I'm pretty sure that no holy scriptures from any religion contains the commandment "Thou shalt not download illegal copies of games off the intarwebz!"

I dunno, I wouldn't put it past the RIAA to make an amendment to a special version of the bible to whack in an 11th commandment: "Thou shalt not deprive artists (by which we mean our middle & upper management) of their income, but one lost piece of silver shall bring upon the world the wrath of god! Fire shall rain from the heavens, seas will boil, paris hilton will put out a new CD!"

"With Britney Spears guest singing!" The end is near(er).