MGM v. Grokster
125 S. Ct. 2764 (2005) - full text opinion
This case involved peer-to-peer file-sharing networks, such as the original Napster, KaZaA, and, of course, Grokster. However, not all peer-to-peer sharing networks are used for trading music and movies. Some versions of the open-source operating system Linux (such as Debian) are distributed via BitTorrent, a peer-to-peer filesharing mechanism. BitTorrent works by splitting the file to be shared into a number of pieces, and having all sharing users constantly upload pieces to and download pieces from other users. This way, a server is not overloaded by thousands of users trying to download a file, as the burden is shared among all the users.
Some artists, such as ambient/electronica musician John Stanford or Celtic rock group Carbon Leaf, don't mind allowing users to download their works for free. Some recording labels are similarly open-minded, like Magnatune (slogan: we are not evil) - they have over 350 complete albums on their website that you can sample, and, if you like them, buy for as little as $5.