There was a news article where the recording industry went after a housewife for have 16 songs available for sharing.

Both.

I have more than a 1,000 songs in my limewire I have to delete them?

Sharing music is more likely to get you in trouble than downloading music, and here's why; Protected music files are embedded with a license. Say you buy a cd at the store. You take it home and rip it to your computer. Each song file uses this embedded license to recognize YOU as the person the file is licensed to (licensed meaning: you have express permission to use the file). You're allowed to share your own licenses between a certain amount of your own devices (mp3 players, other computers, etc). What they do when they look for people who are committing crimes of illegal file sharing is they look at the license. If you share that cd you bought on Limewire, everyone who downloads it also gets that copy of the license embedded in the file that says "joe blow ripped this to his computer at such and such a time" or something along those lines. So by looking for this license information, they're able to find what material is being shared, who's sharing it, and who's downloading it. If you're sharing protected music that you've downloaded from someone else on Limewire, you're also likely to get in trouble if someone you've downloaded music from gets busted for sharing their music - because you're sharing a file that they already know has been "pirated". It's complicated, and even further so because Limewire is a peer-to-peer network with millions of users. They are finding new ways to discourage illegal file sharing. Windows Media Player checks for valid licenses before it will let you play protected files, and from what I've heard of Windows Vista it also has some "enhancements" to the DRM system to keep people from sharing and downloading licensed material illegally.

Dont know but i think its fair enough as you should pay for music