Sharing with friends via a server is as much copyright infringement, legally speaking, as sharing with randoms on bittorrent. Its just much harder to prove, much less financially beneficial to prosecute and much worse PR if you do it anyway to set an example.
"Making a noncommercial mix tape (as in, an analog audiocassette) of copyrighted songs is immune from claims of copyright infringement, thanks to the Audio Home Recording Act of 1992, 17 U.S.C. ยง 1008."
most of my music is not bit perfect though... they are compressed mp3's of decent quality (but if you look at the bits, they probably look nothing like the originals)