Some of the above answers are very good at explaining the technical aspects of this fileshare method. What they have not gone into, is the dark side of this double edged sword; namely, bit torrent and other file sharing sites being used to get (free) music and videos can be total disaster for your Windows machine.
Because they use multiple 'peer contributors' to feed bits & parts of a requested file (music, movies, etc.) back to you, there can never be any kind of certainty about the status of the sender's file.
Whatever they have = you get: malevolent or not.
Once downloaded to your machine, all bets are off about it's safety to open, transfer, use or re-send; and size of a file has little bearing on what it may or may not contain; scanned or otherwise.
To get an idea of how prolific and devastating this can be just look at the number of 'Yahoo Answers> Security' requests for help about virus/spyware.
Most of these Yahoo users are younger & more likely to be using the trendy socializing sites and peer-2-peer services (Limewire, etc.). Hackers know this and target efforts to infect machines by these sources (aka 'vector').
Once infected, a long cleaning , endless aggravation & malware prevention steps will not guarantee immunity from a re-infection, because virus crafters constantly change the names, file properties, footprint & signature, source vectors or anything possible to propagate their garbage.
Use @ your own peril...
IMHO: Music & Movie bigshot mogulsteins intentionally provide infected seed files to users of this service, just to create an atmosphere of mistrust, fear and to break the machines of peer users. One way or another, they will make you pay, and eventually have to move to Vista which has far more DRM features.