LaLa.com is a startup that is currently running in beta. It takes some Netflix ideals, smashes them up with a little bit of Half.com, and they have a service that will allow the trading of CDs through their marketplace. Users sign up and list some of their CDs that they are tired of. They send them off to people who would like them, using LaLa's prepaid envelopes. They earn credits so that they can request discs from other LaLa users.
There is a $1 transaction fee per trade and an additional $0.49 fee for the envelope. So, at the end of the transaction, you have traded an old CD that you presumably did not want any more, for another disc at a total cost of $1.50.
It sounds simple and perfectly legal, but there are some logistics and legalities that will probably come into play. First of all, if you trade a disc away to someone else, it is your responsibility to delete any additional copies of the music that you might have made legally when you were the owner. For example, if you have a ripped MP3 on your hard drive or MP3 player, you should not retain that digital file when you no longer own the physical CD. I am quite sure that this type of piracy will be rampant throughout the LaLa community as people just rip and trade.
This is a problem with no solution, though. At this point, there is really no way for anyone to identify these people. And these people already exist. They rip their CD collections and then sell the lot of them on Ebay or through Craigslist.