As someone who is a musician, I've got a wierd perspective on this. I hate the record industry, and hope they die, but I also believe that musicians are entitled to some reward, be it monetary, or critical accolades, or both. I see Napster and all the file sharing stuff as really just a first step in making the Universals and Aristas obsolete.
I've heard that Virgin is going to start their own "pay-per-song" file-sharing service. Their owner/CEO, Richard... something... I can never remember his name... seems to be an entrepreneur in the classic sense of the word. Superior product, at a competitive price. And now, a superior distribution method. You preview the songs, pay for only the ones you want, and roughly 85% of it goes to the musicians.
Sounds good to me!