like Vinterstum said... One can never explain this issue in two paragraphs. I'm referring to US laws only.

for more info on all this go to: http://www.eff.org/
Support them if you can (I'm in no way affiliated with them!)

Don't quote me but I do follow these things closely... From what I understand. It's generally fine to do what you want with software as long as you own the original. Copies for personal use (not you friends or your sister) are fine too (Back-ups). It's what's defined as "Fair use". http://...