Never answer them. As soon as you do, you become a more refined target. Might as well make the noose yourself.

isp's don't want to be policemen they want to be shopkeepers, and what are shopkeepers good at ? making you pay more for the same old product

ISPs don't care about piracy - they pay lip service to the authorities because they know the end consumer who pays the highest monthly subscriptions is a "pirate"
In the UK , Virgin Media is rolling out its 50 mb broadband line to replace the current 20 mb line with the advertising slogans "download an entire album or film in xxx seconds " - now who on earth is that aimed at ? the casual web surfer or someone who downloads and pays for tracks from itunes or another alternative ? I don't think so.
I think most people know now it doesn't matter if your line is 2 mb , 20 mb or 50 mb - it won't connect you to yahoo or any other site any quicker.

I have never recieved one of these letters, but I hear that they generally don't come from ISPs but rather from various company-hired moles who will download enough of a file from you to determine that you are sharing one of their studios copywrighted properties (film/song/etc) . Then they use your IP to determine your ISP and get the ISP to slap your wrist ....or worse.

That's what I've read anyhow, is that true?

yes it's true - that happens in the UK with the wonderful lawyer firm of Davenport - Lyons , who make their money by snooping on the net via p2p programs and logging info and then actually contact the companies that hold the copyright on the infringed work and prostitute themselves and their services to go after the supposed "violator" to threaten him into parting with cash - a bit like ambulance chaser lawyers on steroids.

however, this is something different with UK authorities trying to get the ISPs to send out the letters themselves and participate actively into snooping on what people use their internet connection for.

domie, I agree with the duplisity of the ISP. They are in it for the money. Virgin and Comcast lead the industry with hard hitting, effective measures against P2P. Comcast sent out a soothing letter probably after too many persons left Comcast. They stated they would lift bandwidth restrictions sometime this year. The cable companies did not have enough bandwidth to compete with fiber. They were taking bandwidth from the internet to bolster the TV bandwidth. TV is where their profits lie. They had to reduce P2P to make the service work with less bandwidth. There is a new multiplexing method that is comming out this year. Apparently Virgin beat Comcast to the punch being the first huge ISP to instal the technology. With double the bandwidth they can match fiber making P2P not much of an issue.