Is Gnutella Legal?

Gnutella itself is legal. There is no law against sharing public domain files. It's when people use Gnutella to distribute copyrighted music and films that its use becomes illegal. This is the problem that got Napster in trouble. The music industry is officially upset about Gnutella, but there is currently no easy way to control it.
Attacking the Gnutella architecture is one way to disrupt file-sharing activities. There are currently two approaches being used:

Overloading the Gnutella network with a flood of bogus search packets.
Filling Gnutella servers with corrupted files.
Gnutella's many developers have adapted to problems in the past, so it is probable that new software can work around these threats and keep the files flowing.
The debate at the moment is how much financial damage file-sharing actually causes. Is a shared file a theft, or is it a form of free advertising and exposure just like airtime on the radio is?