As I understand it, the only reason programs like Kaaza were ruled legal is because they could be used for legitimate purposes, even though their primary use was illegal. In the same way, a VCR is legal even though it can be used for illegal activities because it also has legitimate uses.
Thus bittorrent itself, and bittorrent clients are legal, because even though their primary use is illegal, they can be used for legal things.
However, site hosting torrents for copyrighted material would seem to be in trouble. A torrent to a Britney Spears song has no legitimate purposel; it can only be used for commiting copyright infringment (not that Stompy would host a Britney Spears song
).
To go with the rock analogy, passing out rocks outside of Blockbuster is like writing and distributing a bit torrent client. It's cool because even if the obvious use is illegal, it could be used for legitimate things. On the other hand hosting a torrent is like passing out the code for blockbuster's alarm system, which I imagine would get you charged as an accessory to the crime.