Kazaa logging user downloads?

I just noticed a minor bombshell exploding over at Slashdot about Kazaa's file-sharing software. Apparently, court documents have shown that the folks behind Kazaa are logging user download information. Among the juicy bits:
They include extraordinary admissions like: "Reporting will make Kazaa look like spyware, as soon as it becomes evident we record downloads and playbacks, users will flee to competitive networks" and then "One can argue that we have knowledge of copyrighted material being downloaded in our network and have to install filters. If we are reporting [gold] files, then technically we could do the same for every file."
The info logged reportedly includes IP addresses that can be associated with the names of files downloaded. Yow. Here comes the RIAA.
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