It becomes illegal when the artist doesn't profit from it. Plain and simple. According to law though (although this too varies according to where in the world you live) you are entitled to a backup of your original cd/dvd. So the person's daughter (ArrwynCliona I believe it was) who copies her cd and keeps the original safe is doing something perfectly legal. I too do the same thing. As soon as I buy a cd or dvd, the first thing I do is make a backup and keep them in a safe. Yes literally a safe, laugh all you want but my originals are valuable to me and I wouldn't want them to be scratched, broken or damaged in any way, especially because of someone being careless. The crime is not just selling the copies, even giving them free is a crime, that is why producers are having a problem. A lot of people who download music off the internet do so without paying a cent, this is why artists and producers are feeling the pinch. If a person is given a choice between two things that are the same but one is cheaper, which one would you choose. The thing about mp3's were that the human ear can't really tell the difference between the original and a good mp3 rip, so that it was why it has become so popular. With faster internet connections now, I feel that piracy will only get worse by the day. Before it took you minutes to download an mp3, now you can download the entire album in the same time, even less. Piracy is stealing, bottom line.
I keep hearing different things about whether or not it is okay to make a backup to music, or movies, that you already own. I hear "No, it's not okay, but when I was younger, I transferred my music to cassettes, this very question came up, since on the CD it says that you can't copy it, yet the very same company will produce a blank cassette that says, "Great for CD's". How is it that it is illegal to copy their CD yet they make a product that says right on the package that it is good for copying?
On a side note with music downloads, like what other posts have said, it is only illegal if the band doesn't approve of, or gets any royalty from the sale.
Rock stars slam disconnection plan for pirates
Some of the biggest names in the music business, including Sir Elton John and Sir Paul McCartney, have slammed the record labels' plans to disconnect from the internet people who are caught repeatedly downloading music illegally. Ref. Source 1