Enter BitTorrent, which boasts faster file transfers and more reliable downloads than other P2P networks. BitTorrent was not the first P2P network to host pirated DVDs and software, but it was the first to make the trade of such hefty files practical. Moreover, BitTorrent claims it automatically cleanses its network of both viruses as well as decoy files. The latter defeats related antipiracy efforts by the music industry.

BitTorrent's other great advantage is its ease of use compared to "darknet" services used by more sophisticated pirates, such as Internet Relay Chat channels, private FTP sites and Usenet newsgroups. For most Internet users, darknets remain hard to find -- you can't simply Google them -- and intimidating to use.

Microsoft's worst nightmare would come to pass if P2P software piracy becomes as pervasive as the movie and music piracy. Already, the number of songs swapped illegally online surpasses the number sold in stores or online at sites like iTunes, says BigChampagne CEO Eric Garland, citing music industry estimates.

Victory by assimilation?

Faced with this situation, music and movie companies are starting to co-opt P2P. Record companies are using services like BigChampagne to scout music trends and sign up-and-coming bands, while movie studios such as Paramount and Fox have linked up with BitTorrent to sell movies via downloads.