Dear sassejan
I can't comment on US law, as I live, work and play in the UK, but I recently read that a US judge had ruled that owning P2P software, like Limewire, is not illegal. However, sharing copyrighted material, without any recompense to the owner, will cause your RIAA to come after you.
If you want to be totally safe and legal with your music downloads then try Amazon.com or Napster, they charge per MP3 you download.
A good rip-off artist mixes half truths with lies, so that you don't know where one starts and the other ends. Safest bet is to treat anything a con artists says, or writes, as pure lies, that way you will be safe and not loose any more money.
One other thing I forgot to mention, whichever payment methods you use check that the scammers cannot extract any more money from you.
UK Bob
PS. If you check this forum you will see that another unfortunate, called "tyoneon", has been ripped off at the new $39.95 price tag. It seems that the cost of conning people is on the way up, it must be inflation
.