While the use of limewire itself isn't currently illegal, the parent company of the program was recently taken to court by the RIAA regarding claims of copyright infringement.

Just a couple of weeks ago, a federal court found that the company that operates limewire is liable for copyright infringement, and could face fines in the millions, which would easily put the company out of business. The music industry argued that the owners knowingly committed copyright infringement, engaged in unfair competition, and assisted users in committing infringement. They also argued that the engineers who developed limewire optimized features to ensure that users could easily download digital recordings, the majority of which are protected by copyright.

Many journalists expect the RIAA's next move will be to force the parent company to cease and remove limewire's file sharing functionality. They would argue that the core functionality of limewire is to promote illegal piracy and legally ban anyone from selling it, until file sharing was removed.

It still isn't known if the music industry will take action against the users of limewire and seek legal action against them for piracy. It's not impossible, since the RIAA has issued fines before against individual users before.

It depends on what you're sharing on limewire. If you're sharing copyrighted material for free to other users, then that's where the illegality comes in.

if its public domain, or creative commons, or your sharing you own content then yes that's legal.

But downloading somebodies else's stuff without permission; which isn't licensed that way if theft.