However, a friend who "collects" music off of the internet (he could not possibly have time to listen more than once to the thousands of songs he has), keeps giving me CDs (mp3, usually) of stuff that he thinks I might like.

As a former software professional, I think that it is wrong to copy and use stuff, so If I find something I like among the things that he gives me, I sometimes buy it. As a result, I have purchased half a dozen CD's to add to my modest collection. For example, I had never heard of "Iris Dement" before, and I'm NOT a country music fan, but I have ended up buying three of her CD's, because I liked her stuff that he gave me. Clearly, the music companies should encourage sharing to me.

But zillions of teenagers with their iPod's and Rio's etc, will never buy a song if they can get it for free. Probably 95% of their stuff they would never buy anyway. But the 5% may be significant. It is hard to tell.