I really don't believe that to be true. The fair use exemptions to the copyright law are pretty specific, and while the courts have weighed in a little to expand them (notably in the case of VCR "time-shifting"), I don't recall ever seeing, and couldn't just now find, an exemption or court case that specifically allowed copying friend's materials. In fact, I remember Metallica got a lot of flack during the Napster battle because in the liner notes of one of their old albums they admitted to sitting around copying each-others albums.

Eternalsun, my apologies for the blanket statement. You are correct, others countries do allow it. I gotta watch that U.S.-centricness in this wonderfully multi-state thing called the Internet.