Well there have been a few threads on this that go pretty in depth. Now a search will tell you more then I can but I will be able to answer it in short.
The Limewire Program itself is LEGAL
What you do with the program YOU ARE LIABLE FOR (This is what can be illegal..the program itself is ALWAYS LEGAL IN ANY SITUATION)
If you download a COPYRIGHTED mp3 or avi ect... you CAN get fined big-time
heh, of course all of us here use this program for "legal" purposes
p.s. This is true for ALL file-sharing software you will probably download. The only legal ones I know of are iTunes, MusicMatch...and some others but I can't quite get them to come to mind....
Hope I have answered your question