Here is an interesting philosophical look at the problems and intricacies surrounding digital copyright.

For example, is it illegal to distribute 1 bit of a file that has been encoded as an MP3 from a copyrighted CD? Plainly not. Especially as the record company isn't the creator of the MP3, and due to the variances in encoding, it's likely that each encoding will be unique. Are 20 bits illegal? Are 1000 bits illegal? And what happens if someone stands on the street corner shouting out the bits that make up an MP3 file of a copyright music track?

Anyway, this guy has written it all up very well.