"copying and distributing" is legal, you just have to be sure that what you copy and distribute is not the property of somebody else. Most mp3's exchanged contain copywrited material (i.e. owned by a Record Company), it is illegal to copy and distribute this material. It is also illegal to "stream" music that is copywrited it over the internet as this could be considered 'distributing" it, and you would also find the music industry publishing groups such as ASCAP for coming to you asking for a fee to broadcast this type of material, (ASCAP [The American Society of Composers, Authors and Publishers] collect fees from Radio Stations, TV shows, movies etc. for broadcasting the music).
iDisks and iTunes could be used in the manner you suggest, which is a great idea by the way, but who is going to scour the internet looking for unknown bands or artists to listen to?
[This message has been edited by iSilver (edited 04-01-2001).]