if you don't sell it, you can't be found infringing when making digital copies.

More importantly: When using devices which make digital copies (CD recorders, digital audio tape, etc.), you are paying the record companies a royalty/tax through the sale of the device or the media. So they are actually happy when you make digital copies because they make money on the transaction.

The only thing is, now they're pissed because they can't tax the copies you transfer over a network. Only when you record these onto a taxed media do they make money.