Chris Anderson (Wired’s editor-in-chief) has a great editorial on the potential terrible impact that a finding for the entertainment industry in the Grokster case might have.
The main flaw in the case against Grokster is that the action attempts to criminalize a technology rather than a specific use. It also fails to distinguish between commercial content and noncommercial content. Restricting these powerful new distribution tools to fight piracy would hobble the new emerging creative class too. The potential collateral damage to legitimate users is much higher than in the Betamax case.