Artist should be the ones to decide on how they want their music distributed. If the artist doesn't mind having his music shared for free then their music should be able to be shared. On the other hand if artist are against file sharing then there should be some copyright on the music and a fine for people who share the music. However if the artist is under a record label then the label are the ones to make those decisions.
However the problem is determining illegal sharing. If a person buys a cd or program, then he or she should be able to share it with his friends. But if they are going to share it then they have to put it on a cd. This way people won't share like crazy because it will cost them money to buy blank cds. This means that programs like limewire wouldn't be legal.
Programs like itunes are good programs that help get rid of illegal sharing. itunes could change some things like letting users download songs for free but only for several days so that they can check out the songs and see if they want to buy it. Another good thing about itunes is that you can buy single songs and not have to buy the whole album. Nowadays not much artist make albums that are filled with good songs, so it seems like your paying 15-18 dollars for couple songs.
In conclusion, file sharing online should not be legal unless it is like itunes. People who buy cds can share their music only if they burn it on their own blank cds.