Taken from
HERE
"But Is It Legal?
As for whether or not it's against the law to make CD copies of music, things get a little fuzzy. Everyone--from the Recording Industry Asso-ciation of America (RIAA) to the Electronic Frontier Foundation (EFF), a civil-liberties advocacy group--seems to agree on one point:
"It's perfectly legal for you to make copies of your own music for your own personal use," says Robin Gross, EFF's staff intellectual-property attorney. "It's called 'fair use.' It's your legal right to do so, even if the copyright holder doesn't want you to."
So if you want to take all your Radiohead albums, rip selected tracks from each of them, and burn a mix CD for your own use, there's nothing wrong with doing so.
But when you make a mix CD for someone else, or create a CD from music downloaded from a source such as Napster, things get tricky.
If you were to pass your Radiohead mix CD along to a friend, fair use becomes debatable. If listening to a track on that mix CD inspires the friend to run right out and buy a copy of Amnesiac, then you might have a case for it being a fair use of the material, according to the EFF. Not so fast, the RIAA counters; that Radiohead CD is legal only if you also hand over to your friend all the legally purchased Radiohead CDs you used to burn it.
The RIAA's position is unambiguous: making a mixed CD of music you own and then giving that CD to someone who does not own that music violates copyright law.
So who's right?
"There is no bright line," Gross says. "We've never had to draw the [copyright law] legality down to that level of distinction before. That's really one of the problems right now. There isn't a clear guideline as to how we're supposed to analyze. That's why it's important to pay attention to what people think. One important thing to consider is that the law should spring from society, rather than be imposed from above."