http://en.wikipedia.org/wiki/Dvd_regionsRegion codes are a stupid idea and are just a minor annoyance.
And yes there are DVD's that are "region free" and players that are "region free".
Now what this means in the context of fansubs is, a fansub group will not sub shows that have been licensed and released in their native country. So when an Anime is licensed and released in the US, it is a region 1 disc. Distributing those is a violation of US copyright, and would get the group in big trouble.
Now Japan is in DVD region 2. Distributing those is a violation of Japanese copyright, but the companies don't seem to care much. Because if they wanted, they could push the issue under the Berne Convention.
Now the UK is also in region 2, so if an Anime was licensed in the UK, any fansub group based out of there would also drop those projects.
So in short region codes are intended to hinder people from importing DVD's from other regions instead of getting the release that was intended for their region.
I hope I explained that well.