its technically illegal to download/upload songs. however, you cannot be prosecuted for downloading songs because you arent the one breaching copyright. the person sending the song to you is breaching copyright. therefore, you have no fear from the law as long as you dont upload. however. not uploading anything is against the spirit of file sharing and if you do this you will find yourself remote banned with alot of users who refuse to share files with you.
lastly, there are over 60 million kazaa users that share stuff every day. this does not include any users from soulseek which i regard as a largely superior p2p network to get music. the RIAA can scare you by issuing a subpeona. a subpeona is basically a letter which informs you that legal action is being taken against you. it costs nothing to issue one of these but it does cost money (alot of money) to actually sue you for breach of copyright. its not feisible for any record company to sue all kazaa users and in either case, its difficult to prove whether you owned a copy of the songs you copied. you could for instance have sold on the cd during the time in which legal action was taken against you. you may have lost it. in many cases you could have paid cash for the cd so there is no financial record of your purchase altthough the onus is on you to prove you bought the cd. it is correct that you are allowed to make a single copy of a cd that you own for personal use or backup purposes but it is illegal to share this copy. so yes, trading cds is technically illegal too but plenty of people do it all the time. however, in the unlikely event that law calls you to question you have to have proof that you purchased the cd (receipt etc) or you are up shit creek. since ive paid cash for quite a few of my cds and lost most of those receipts i dont actually have any proof of purchase except for the cd itself which will suffice. but. i bought sonic youth's daydream nation years ago and lost the disc. i downloaded the songs off of soulseek cuz i miss that cd, one of my favs from a long time ago. as such i have illegally made a copy because i cannot prove that i purchased it. even though i did.
in either case, the chance of you being singled out is highly unlikely. 1 in 60 million? you have a better chance of being struck by lightning. it is also cost prohibitive to the record company or the RIAA to sue many people. they issue subpeonas and like to put out ambiguous threats that it 'may' be illegal to download music. the legal action they do take is normally against the big fish - the people on corporate networks that have hundreds of upload slots and share hundreds of files per day. it is in a record company's best interests to take these 'hub' users out first rather than digital screams who only popped to kazaa cuz he wanted to reminisce about what a great song holiday was. i really wouldnt fear. ive shared a few files on both kazaa and soulseek and there are 10s of millions of users on both networks which share more than i do. go for it. its extremely unlikely anything will result from it. however, if you really like the songs its recommended you buy the cds if you can. i downloaded the entire saetia discography before i bought saetia's retrospective cd. i respect level plane recordings and i appreciate that without support from their listeners, they would not be able to put out great tunes
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