Slowly our rights are being taken away.

How did this happen? The answer is that recent changes to copyright laws have given increased power to the content industries at the expense of ordinary citizens. For most of the past 200 years, Congress and the courts maintained a careful balance between the rights of creators and the rights of citizens. Creators were given the sole right to profit from their works, but in exchange, citizens were given some degree of flexibility to use content that they owned. But over the past few years, that balance has shifted dramatically. The content industry now has unprecedented power in their ability to control the use of digital content, and consumers are left with almost no rights at all.

Beyond the domain of personal media use, the increasing power of copyright laws has the potential to impact more fundamental issues:

Copyright laws can be used to stifle innovation by preventing reverse engineering -- the act of looking inside a product to see how it works. If today's copyright laws were in place two decades ago, it is unlikely that the personal computer industry would exist as we know it, since the development of IBM-compatible computers depended on reverse engineering.
Copyright laws are being used to prevent competition by forbidding interoperability -- the ability of software written by one company to work with software written by another company. If programming interfaces or protocols are protected by copyright, then competitors can no longer build compatible products.
Copyright laws are creating obstacles for libraries. Libraries depend on the ability to archive and loan content, but their rights have been severely limited in the digital domain.

I found that interesting. here is the the link to the reference. http://www.digitalcons...

Not sure this is the case. The RIAA Supplemental Brief reads:

"...Once Defendant converted Plaintiffs’ recording into the compressed .mp3 format and they are in his shared folder, they are no longer the authorized copies distributed by Plaintiffs. Moreover, Defendant had no authorization to distribute Plaintiffs’ copyrighted recordings from his KaZaA shared folder..."

It looks like the case is against the re-distribution, rather than the format.