Originally Posted by warlock5

I'm not talking about right or wrong, I want to know what the legal liability is.

There are a couple factors in place, as you said, "fair use" (which incidently Google is being sued by Perfect 10 for Google Images and has been sued by AFP over Google News too.)

By the logic in this thread, once an ISP removes content they are no longer a common carrier -- yet, according to the DMCA they have to remove content upon a DMCA request or be liable.