Although file sharing is a legal technology with legal uses, many people use it to download and upload copyrighted materials without permission. This is an act of copyright infringement, and it is illegal. Be sure that any file sharing activities you are a part of do not include the use of copyrighted material. Willful copyright infringement can result in criminal penalties, including imprisonment of up to five years and fines of up to $250,000 per offense.
For more information on file sharing and copyright:
U.S. Copyright Office: http://www.copyright.gov
Risks of File Sharing Technology: http://www.us-cert.gov/cas/tips/ST05-007.html