I was just wondering...Can't the host servers be shut down by the courts and if so wouldn't that shut down a major part of gnutella since everybody connects to one of these?

Another question...Are these host servers organized by region?

Yes, they could be shut down, but they don't store any files or do nothing but to store peer's IPs and forward them... Anyway most Gnutella clients will try to reconnect using a list of peers that they build while connected, the problem is when all those host are not available.