The link insertion reminds me of an ISP in another country that was rewriting HTML before sending it. If we want to get very technical, if this happened in the US, couldn't an ISP be dinged for creating a "derived work" of a copyrighted page without permission?
I think that is opening up a can of worms I would rather not see opened. Technically caching could be seen as copyright infringement.
Quite a few ISP's run transparent proxies for caching and technically every time you visit a website you are creating a copy of it on your local drive. If I disable javascript or run other scripts (like via grease-monkey) I am also technically creating "derived work".
