It is 1000ft over urban areas, but police helicopters are already exempt. The reason is because they want aircraft to be high enough they can try not to crash on top of a bunch of people or into some building when they loose power (rather than a privacy issue). A helicopter can do an emergency landing with better control in a no power situation. A 4 pound UAV is going to be able to fly lower than that because it is not going to kill a bunch of people when it looses power and crashes into a school or something.
Anyone that's played GTA Vice City enough knows an RC heli could manage at least one casualty pretty easily on failure (and, just to be sure, I've personally seen enough nitro-powered chicken dances to know this is possibly a _low_ estimate).
