Originally Posted by Nautilus

To fall under safe harbor protection, it is not enough to simply remove stuff upon request. You need to implement some kind of proactive anti-piracy measures such as:

1. Ban repeat offenders.
2. Prevent new uploads of once removed materials using at least file's MD5 signature, or even better digital fingerprinting.
3. Do not reward uploaders (unless they're PROVEN copyright holders).
4. Do not promote infringments, and make it clear that copyright violations are not tolerated.
5. Do not engage in user's activity, unless it is to police for stuff like cp, spam and copyright infringments. Do not have editorial policy (at least do not use stuff for it that wasn't checked for legality) etc. The more neutral your service is, the better your chances are to walk free out of the courtroom.

According to the court cases of the past several years, if you follow somewhere alone those guidelines (as, for example, YouTube does, and more recently RapidShare and Hotfile started to follow them too), you're almost certainly safe from prosecutions by copyright holders.