That's right.

LW lets you connect to the Gnutella network for sharing files... providing LW is the only file sharing client that you have installed then uninstalling LW will mean that people can't use LW on your computer to download files from other people. And no other users will be able to use LW to download from your computer either.

If you just want to stop file transfers, you can set LW to shut down immediately when you close it. But if you want to get rid of p2p altogether then uninstall LW by going to start > all programs > LW > uninstall