circumvention of copy control is illegal in the USA, UK and possibly elsewhere. As long as you don't distribute "cleaned" files you are unlikely to land yourself in trouble.
Here are a list of the successful MPAA & RIAA lawsuits to date:
Removing copy protection is not illegal in the USA as long as it is for personal use on materials you have paid for. Backup copies are legal and prudent.
Distributing digital copyrighted materials w/ or wo/ DRM removed is illegal. This has been questionable extended to analog copies by the courts and congress. Penalty is $180k per song, movie, or ebook.
Reverse engineering copy protection schemes is illegal. Even in an academic environment for study and development.
Manufacturing/sale of equipment that circumvents copy protection mechanisms is illegal. This has been extended to the Macrovision analog protections even though they do not fall under the DCMA laws.
is SounDTaxi illegal to use to take off drm's. and if so is there a way the man could track and find you if you have been using it?
Getting Caught
Over 5k people in the US had been hit with $3-5K fines by Aug 2004 (2.5 years ago) just for having music on a shared web accessible network. Assume it has doubled to 10k by now and that there are 1 million active file shares open.
That means you have a 1% chance of being caught. BUT, 2 friends of mine were caught but not fined. Their ISP protected them and just sent cease and desist orders to them (they did) refusing to disclose their identities. The each only had one movie shared at the time they were caught.
So the policy of your ISP affects your percentage. If half the ISPs are buckling then your odds are up to 2%.
The RIAA and MPAA have been hiring professional hackers to track and ID file shares for 1-2 years now. These guys are good at what they do.
The European and US government have been using their counter espionage organizations to track and capture "paid" file sharing services that do not have valid liscences. When these places are raided the servers which contain the ID of all their members are seized and the membership is ID'd as illegal file shares.
"Do you really need to share files that badly?"
DRM ripping tools
There have been cases where companies selling product that circumvents DRM have been found guilty of violation of the DCMA. These companies have had their servers seized and all customers ID'd and gone after for prosecution. I don't know the outcome of going after the customers. It is probably still in the courts. Be aware anything you buy will have tracks back to you unless you pay cash at a flea market or it's on the shelf at a Best Buy and you pay cash.
Right ways to do it
Get a group of friends together and buy music legally. Strip the DRM for making back up copies. Pass the songs back and forth on media (CD, thumb, etc). This is what we did when we kids, before the music Nazi's. Since you are passing physical media the legality gets very gray. Be aware that if one of your buddies is stupid and shares the common songs on the web he will get caught and narc on you for a reduced fine.
Join apple music store. They have now started offering songs unencoded for slightly more ($1.10 vs $1.00) than a DRM track. I think they were going to be MP3 but can't swear to that. In any event they will be protection free and can be re-encoded to MP3 easily. MS music store has announced a similar impending deal. One of the big 4 (EMC) has folded on the DRM.
Rip the songs off the radio. It worked for me 30 years ago and radio sound quality is pretty damn good now. Time shifting is legal by and act of congress!
Rip the songs off the web radio streaming audio output from your computer and encode to MP3. Time shifting is legal by and act of congress!
Anyone who file shares is a lazy idiot looking to get fined for 100x what they saved by doing things illegaly. $5k is 5000 songs, the payoff is not worth the risk.
PS The solution to this problem is to B O Y C O T T music and video until the RIAA and MPAA decide to stop persecuting their customers.
-Watch TV, listen to the radio.
-Buy used media
-Swap CD's with friends
You do not need an MP3 player with 5000 songs glued in your ear to listen to music. You can only enjoy one song at a time.