Utorrent encryption doesn't work?
I'm not sure how that works, but the way I understand it is: the studio themselves will seed a torrent and then log all the leechers of that torrent, then they monitor those IP's to see how much they upload and once they reach a certain limit they send a letter to the ISP requesting information. Some ISP's just hand it over, Cablevision happens to be very nice and will not turn over the subscriber information until the 3rd incident (ime).
The way that PG can help prevent tracking is by blocking the IP addresses of known studios/agencies etc so that you don't end up leeching from them...
Does free rapidshare also generate these copyright notices?
Not AFAIK, reason being that you aren't uploading to others. So a) they aren't as interested in you, b) the only way they can find you is by serving rapidshare and asking for there logs (not sure how much of a fight they will put up).
The reason that usenet is great is because you can find a provider who dosen't keep logs at all
and since most offer SSL encryption they can't tell what your downloading on the ISP end either...