I have to chime in on this one. No one can come out and say without question that allofmp3 is definitely illegal. I do practice law, but I'm no expert in international copyright. I've looked into this quite a bit, and I've reached a couple of conclusions.
First, Allofmp3 is claiming that there is a Russian copyright loophole that allows them to sell this music. They claim that they are paying the artists through a clearing house, but no one has really any hard evidence one way or the other if this is happening.
Second, what is evident is that American record companies are trying to price fix and eliminate competition among their distributors. 99 cents a song is really outrageous; the minute some company wants to offer the same songs for 49 cents they will never get off the ground.
Finally, given the exchange rate, this Russian company is able to compete because of the strength of the dollar. 15 cents, American is still a lot for someone in Moscow. This is no different than shopping in Mexico for cheap Kahlua.
Personally, I've spent about $40 total on allofmp3 and have no complaints. No DRM in the files at all. Use the songs on any device. I would rather pay some money for the music instead of nothing and claim naive consumer. The songs are better quality than iTunes b/c you can adjust the bit rate.
The music industry has put a lot of propaganda out there to make people paranoid. They have also spent a ton of money in Congress, other corporations i.e Visa, etc., to make allofmp3 go away. Somebody explain to me why in the world our American Congress is concerned about an internet music store. Is that a matter of national security? I can name a few issues that are slightly bigger than digital music. People out there need to be concerned whether or not their congressman has been bought off by a bunch of price fixing gazillionaires like David Geffen. Whatever!