I would love a lawyer to challenge one of these guys.
For those who got letters may I suggest some of the following tactics.
1. "It wisnae me guv, I don't have the file on my computer and never have"
2. "My wireless network is unsecure, I blame my next door neighbour."
3. "I had a virus and some ruffians from Russia must have used my computer to download your crappy game."
4. "I had 20 mates round for a party, one of them must have downloaded it but they were all using the computer and I dont know which one it could have been"
5. "I bought the game but my disk was scratched to buggery so I downloaded a copy so that it would work." (go out and buy a copy of the game and lose the CD first)
6. "Games, I'm a mac user, we can't play games on our machine."
7. "I us3 Linux, W00t d0 u m3an I d0wnl0ad3d a gam3, d03s it play on Linux? I am th3 l33t w00t w00t g0 m3."
8. "It was my gran, she was a harcore pirate, sadly she passed away last week."
9. "Someone must be spoofing my IP address, that's what I do whenever I download something, you'll never catch me!"
I think pretty much any of these excuses would get you away with this without having to do much (ok you might have to install Linux or something but that's no big deal!)