Jack - At Blair House (where the Slot Card Club has it's annual trade sessions) we just had a new room key system installed. I was given a demonstration on how it works.

1. The entire system is self-contained, and is not connected, in any way, with the computers at the front desk. The credit card information given at check-in is NOT transferred to the "key" computer. Also, many people are "cash" customers and do not need to supply a credit card to pay for the room.

2. THe "string" of numbers on the key contains the following information:

ROOM NUMBER (208 for this example)
TIME CARD IS MADE (7:17 pm)
DATE CARD IS MADE (April 1, 06)
TIME CARD EXPIRES (12:00 pm)
DATE CARD EXPIRES (April 3, 06)
CHECK DIGIT (also called the "check sum") -
2+8+1+9+1+7+6+4+1+1+2+6+4+3=57 5+7=12 1+2=3

Example:
208191706040112000604033

I believe the email you referenced was probably part of an "urban legend".