The word is out that the RIAA is backing down from suing people who use the "my IP address isn't necessarily my PC" defense. This means that if you run a free hotspot service from your broadband connection, you may have the perfect alibi if the RIAA wants to sue you for any music downloads activity that was tracked back to your public IP address your Internet Service Provider may have provided you.
With something like an advanced router like the Cisco 871W on which we're creating tutorials for on TechRepublic, you could create a logically separate guest hotspot from your internal LAN or WLAN and apply bandwidth restrictions on the guest hotspot service. This means the wireless freeloaders will never be able to overwhelm your Internet connection and leave you with the short end of the stick. From a security standpoint, the guest hotspot has full (or partial) access to the Internet but zero access to your Internal LAN. The best part is if we are to believe this story is that we won't be sued for our life savings if someone on our network downloads some music on the Internet.
Disclaimer: I am not a lawyer! Please do not consider this legal advice.