I know that the spirit of p2p is alive and well. The "lite" version of Kazaa gets updated all the time with new features and options that keep the network a step ahead of RIAA. For instance, I've heard that now you can configure your p2p client to not store your IP in your .dat files, a new option that is designed purely to frustrate "the man." It is options like this that makes me believe that clever programmers will always keep the p2p networks running.
It's still garishly easy to find anything you want out there, too. Not as nice as it was when Napster was rolling, but it's a fact that there's a lot of media out there.
The biggest downside, as mentioned above, is quality and attention to detail. If I were to download a whole album from a p2p network, I'd most often have to click about for a while. Got to get a list of the tracks on the album, got to search for a good quality version of each song. Once they're downloaded, you've got to tag tag tag tag tag, get the filenames straight, inject the cover art, etc etc. It's a whole lot of work.
So, with that in mind as a contrast, it reinforces the idea of useful post-download products from "legit" music services. P2p is free, aye, but annoying and work-intensive. Full albums, encoded well, reasonably priced, properly tagged, purchased and downloaded with two or three clicks... that's worth paying for.