Personal Use
 

If I use LW to download songs, but do not share and only use the songs to put on my iPod for personal use, is that illegal? Can I get caught?

It depends a great deal on where you are and the laws in effect there (yes, I did see that you are from Texas)

Here's the gist of it: http://www.gnutellaforums.com/showth...ighlight=legal

If you have time and want more info on the matter, click the search button at the top of this page and look for "legal" in the LW forums (it's more than enough, but if you really have time, you can run a search on every forum)

but isn't it true that if you don't share you're not a target?

In a way, yes, but not the way you think: you're probably thinking that sharing is uploading to others. In the case of P2P however, a more accurate definition is "participating in a transfer of files", which implies that wether you dld or upload files it makes no difference: you are still sharing.
In other words, uploading can get you caught, but so does dlding. As the french would say: "C'est les risques du métier" :(
However, the actual chance of getting yourself caught is so darn minimal... The number of people actually using P2P is so insanelly huge that, to catch us all, they'd probably have to arrest half the population of Earth! (got jails big enough?).The ones you see getting caught is because they share certain kinds of files which are sure to get them caught. Besides, you won't go in jail like Morg said.

in order to get caught, do they have to have evidence of you having the file on your hard drive? In other words, could I d/l files to a data cd and not have them on my hard drive?

Well, the thing is that they can get to you if they can see your IP while you are dlding (which is already possible) or uploading, then they can get to you. Now, as I said, consider the number of users that use P2P (no just LW or Gnutella) and you got such a small chance of getting caught...