MP3 Downloading - Where is the crime?

So I had an interesting thought yesterday, and was curious to see what other peoples opinion would be. When the RIAA sues some poor kid (not that I excuse illegal downloading), is the crime based on the fact that they downloaded an MP3 or that they possessed an MP3 that they didn't own a physical CD for?

In other words - could I be prosecuted for downloading an MP3 for a CD I already owned?

Now let's say I download an album - and my house burns down. That's something that can be proved with insurance records. Must I destroy the MP3 if I lose the physical CD? It was my understanding that copyright law (ignoring DVDs and their CSS crap) allowed me to make a copy for 'archival' reasons. Does that mean I need to burn the MP3 to CD and then delete the MP3? In other words - I can legally back up my CD, but must back up in the same format. (Audio CD to Audio CD)

As I said, I'm curious what people know about the law. I know I said I wanted opinion's as well - but what does the law saw about this?

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