[pyre]

I imagine through fingerprinting, checksums of files, etc. Though that's not fool-proof as people can an do change the metadata, filenames, etc of the files they download. (That's not even touching people that download FLAC and then convert to mp3 for 'actual usage').

[technomancy]

Easy enough to claim fair use. "I had this on CD, but it was more convenient to download it rather than rip it myself." seems pretty bulletproof to me.

[pyre]

If they come to you with a lawsuit threat, you'll still have to pay money to argue that defense in court.

[baddox]

Not only can people change metadata, there's also a good possibility that a scene group and an innocent home user would make separate rips of a CD that would be bit for bit identical. There are checksum databases online that enthusiast rippers can use to verify that a ripped CD is identical to the results other rippers have achieved (i.e. no errors occurred in the ripping process).

There is a whole technical community dedicated to getting quality CD rips. As an example to how serious people are about this, one technique is to disable or circumvent the optical drive's buffer and make multiple read requests to each area of the disc to help ensure that the correct data was pulled in.

http://www.accuraterip.com/

http://www.digital-inn.de/forum14/