I screwed up, can it be fixed?
 

When I started on my first download a window poped up saying the file had no license. I accidentally told it not to download such files. Now I am prevented from downloading totally legit files that I share with my friends because of this. Can this setting be changed and where do I do that?

Try this: Tools > Options > View > Popups. Now tick 'revert to default' & press apply.

You might have to re-start LW for this to take effect, I'm not sure.