Not that I'm proud of the fact, but most of my "digital" music collection, was obtained in the hayday of Napster. I've been slowely buying legit copies of songs to replace the downloaded ones from years past. I was a little apprehensive of uploading my collection to google music, but have had no negative repersuccions due to it.
The loophole found here, is that say I buy a music cd, and I have no way to transfer it to a mp3, I then download said mp3 (is now my digital copy) that can be moved to my phone or other media player device, while keeping my "origional" safe. The problem comes in if I'm sharing that same mp3 back out to others. So far, all cases of digital piracy were not from the download, but the fact that while downloading, the files were made available for others, either by default downloading to a "shared" folder, or a torrent that pushes parts out that have already downloaded to spread out the bandwidth away from the seed. For you to get in trouble for "downloading" music or movies, they have to prove you are not obtaining a "backup copy" which is allowed by the DMCA. You are not allowed to make it available, and thats where people get nailed.