Carl,
I heard a good one on NPR the other day, about how record companies are dealing with the royalties from digital music sales. Apparently they still deduct packaging/shipping/promotional/production etc. costs from the royalties, so the artists get little of the money owed to them. The story featured the "Gma got runover by a reindeer" guy and how little money he's gotten from the, well I forget how many downloads, but it was a bunch. Of course all of the promotion costs were made up for long ago and there were no packaging etc. costs. Quite the rip-off of the original artist.
I myself continue to buy "legit" CDs with the intent that the artist will benefit, but how much do they really get? I think the behavior of the record companies leads the the feeling that it's "OK" to rip them off, since they are sheisting thier own artists and consumers.