What you are touching on here has been the subject of legal debates for YEARS and is highly controversial.
Here is the basic rundown:
1. Limewire itself is just a file sharing system. It has not and will never be illegal. What's in question is some of the stuff people choose to use it for.
2.When you buy music it is NOT yours. What you're buying is a right to listen to the music, you are not buying the song iself. Technically it IS actually illegal to give the song to your friends.... it's just that the monetary loss is so minor that most studios don't bother prosecuting for it.
It's just like how jaywalking is technically illegal but you can still get away with it because it's such a small thing the police don't want to bother with it.
NOW here is where the controversy comes in: let's say you have legally paid for the music, but you lost your copy or you just want it in a different form (like you want it as an MP3 instead of as a CD) Is it legal for you to download it off limewire then?
Like I said, it's controversial. My personal opinion is that if you buy the rights to a song then you should have the right to listen to that song in whatever format you choose, and that you have a right to get a copy of that song at any time. That is why when my computer was stolen and I lost all my music, I felt completely justified in downloading it again. However those on the other side of the fence say that no, your license is only tied to the copy of the song we gave you, and so if you lose it or want it in a different form then too bad. Hence, the controversy.
So there ya go. Now you have the facts.