Guys, you are worrying for nothing. I use Dolphin for almost 2 years, and the first thing i was thinking was the copyright infringement . What Sammie have said is a partially good job to do. But this is not enough if you want to play safe. What i have to say, in addition to what Sammie said, is that i also removed the Embed and the file's URL field from the music/video files. This way you make sure that nobody will waste your bandwidth or embed it in some other sites. (that's considered as sharing)

And see more if it comes to troubles, (which i doubt in this case), then you are not directly responsible for what users upload, because you cannot check if the file is copyrighted. :) In this case, your videos/music files are not forwarded to anyone, but just for displaying purposes, and ONLY on your website, so you do not give the opportunity to your members to get you deeper into problems.

Take YouTube's example. I have seen many video copyright violating files, but they keep it on, until someone comes with a complaint followed by a proof that he has the rights over the file. And i don't think Mariah Carey can sue YouTube. It is also essential to add some lines explaining Copyright protected files terms, and then you can sleep well, protected by your TOS. Meanwhile you can see YouTube's TOS, especially from point 7 and 8. Perhaps you can inspire from their TOS. ( http://www.youtube.com/t/terms ) And there you go, add some lines about that in your TOS where your users are warned about it, even if most of them don't read it, you done your part.

And if it happens for you to be notified by someone claiming copyright infringement he has to come up with evidence. And what you can do in this case, you just delete the file as YouTube does, but only if you have to, sending a message to the user followed by an explanation, warning him or deleting his account, depending of your TOS. Simple as that, you stay clean as well as your website. :)