We've gone after two individuals in the past who we learned were using our copyrighted content on their paysites (one of which had it plastered on the mainpage and tour).
In both cases we contacted the site owners with emails that threatened legal action if we weren't monetarily compensated for our 'potential loss of livelihood due to the copyright infringement'. The emails were composed with some help from our company attorney - and they were rather intimidatingly worded.
Both webmasters contacted us shortly after receiving the emails (one even called us in a panic by phone from Britain around 3am, lol - forgetting the time difference). And in both cases we reached a satisfactory settlement with each individual.
But that was a few years back - we haven't been too active lately in chasing infringement situations. We're aware the infringement is still happening, but its time-consuming to chase them down. Not to mention that it can be like trying to get the proverbial blood from a stone (read: kids livin' in mommy's basement).
Basically, we wanted to set a precedent for ourselves to refer back to in the event that we came across a really blatant and damaging infringement situation.
You might want to have your MIT pal check out the (somewhat old) Suze Randall vs. Max Sheridan infringement settlement details -
http://www.a-w.org/news/051600.htm - $338k were awarded during the case and it was considered somewhat of a landmark case back in the day.