There are several articles on that subject and the thing is noone knows ... an interesting article on the subject, that gives you an overview is in the German CT magazine from 12.3.2001 (6/2001) - a well know computer magazine.

I summarize the problems mentionend: In German law (and I guess it is pretty much the same everywhere) there is a duscussion wether downloading files protected by copyright is permitted or not. Pro-permitment ppl say that how can a downloader distinguish if the offered file is legaly distributed or not - e.g. the offering web-page has the right to distribute the file. Some band offer (some of) their songs for promotion purposes in the net, some labels prbably as well. So how can one decide?

The Cons say that illegaly offered copyright law protected material cannot be downloaded legally.

But offering files with copyright law protection in a file-sharing net is considered as illegal though there is usually no commercial intention in filesharing systems and the files are shared for private use. (In Germany it is allowed to make a copy from everything you bought for example as a backup-copy. Also those copies may be shared among "friends" - I say friends here not as a citation or a law term. But what your "friends" are and may be is not defined by law -> problem)