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@scoober
I have heard that peer guardian is not so reliable as it is easy for the companies who monitor torrents to set up with new IP addresses.
Similarly, as I understand it, encrypting will hide your traffic from the ISP (except Virgin who now deep packet inspect), it will not stop your IP address from appearing in the swarm - which is how the record companies find you anyway.
The reason they go after seeders is that it is distribution of copyrighted material which is the offence. I think the downloading bit is not straightforwardly illegal.
A proxy would be the way forward as this would hide your IP from the swarm, but is reportedly slow. And I am not actually sure how you would set it up.