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In a nut shell P2P file sharing is illegal.
That would depend on what you're sharing. If copyrighted material, yes it would be. On the other hand torrents are often used for entirely legal sharing of things like Linux distributions, OpenOffice etc.

All P2P file sharing software that uploads while you download would be illegal.
Only if used for copyrighted material. There is a lot of legal file sharing going on as well. For example, a lot of open source software is distributed that way.

Uploading or distributing copyright content is completely illegal.
Not necessarily. It's distributing without permission that's illegal. For example, any software released under the GPL licence is both copyrighted and legally sharable. It's not the tool, but how it's used that's illegal. For example a hammer can be used for legal purposes, such as building a home or illegal, such as breaking someone's window. To ban hammers because some people use them to break windows would be nonsense.
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