Peer to peer filesharing is not illegal.
If I want to distribute my own personally written music over P2P, I can can. There is nothing wrong with it.
Distributing copyrighted music in any form, including P2P, is illegal.
Distributing includes me giving you music I ripped off a CD, an MP3 player loaded with music I own but you dont, P2P, Usenet, Internet, etc. Essentially, if I do not own the copyright of that music, I can not sell it, give it away, load it, etc., if it does not fall under fair use.
Tom