I'm curious what Grooveshark does that allows it to be legal, where as p2p networks, youtube, megavideo, etc. routinely have to take down their copyrighted content. Anyone know?
The answer is: Grooveshark routinely has to take down (unlicenced, non-fair-use) copyrighted content, just like the others. That's the cost of DMCA safe harbour compliance.
Pretty much. You'll see that the aggressive ones are taken down, like the Beatles, won't find that at Grooveshark. However, you can upload your own Beatles tracks and label them differently "B34tles" and it'll stay up there longer, just like the Kazaa days.