When home audio and video recorders hit the market, the record and movie companies sued again, and lost. In fact, the landmark 1984 Sony vs. Universal Studios Betamax decision established fair use criteria for home taping that says you can pretty much copy your own records and videotapes any way you want for your own use. If you shut down its servers, Napster vanishes. They have no central index and no company behind them. Thousands of servers are connected to thousands of other servers, sharing information about the available files.
Any machine can become a server, and anyone can download files.
They're a constantly changing tangled web, with uncountable numbers of machines all over the world unpredictably joining in and dropping out. The protocols are purposely constructed to obscure who's sharing what with whom. It started out last year as a sort of skunkworks project at a small company called Nullsoft. Despite this, enough of it had leaked out for hackers to reverse-engineer the protocols and publish them for anyone to use. Soon programmers wrote Gnutella clients for all the major operating systems, and most of them are free.