It is highly unlikely that this issue is the result of someone altering the Limewire code as to prevent the downloading of copyrighted material. Why? Because the issue in question does not affect the downloading process at all, but rather the place in your hard drive in which downloaded files end up. Moreover, it's not as if you can't figure out where your files are - all you need to do is click on the Tools tab of the Limewire Pro interface, then on Options. Your Save Directory will be listed. It is reasonable to assume that if Big Brother didn't want you to enjoy downloaded files, they'd make it significantly harder for you to find them!

Because the problem with the Save Directory appeared around the time Windows XP's Service Pack 1 was released, a more likely explanation is some sort of software compatibility issue.