As a heavy Torrent user I have done some reading on this. There is a pretty even split on if it is effective or not. Basically its just a list of "known" IP's that monitor you for illegal activity/files. The problem with this type of system is (as somebody stated) these numbers change, new numbers come in etc. Its (if it actually works like it says) always going to be out of date some. I'm of the mind some protection is better then none. Here is mini breakdown on the ins and outs and the reasons for actually using such a program.
I have been flagged for downloading TV shows that are... Um .. freely downloadedable from legit sites, but I guess you cant from Torrents. My net provoid er is 3 strikes our out, I was flagged 2x in about a year and since using peerguardian ha vent been flagged in about 2 years. Does that mean it works? No idea.
I know many who use Torrent for actual no-no's and we have discussed it at length. It seems to be the "hot" items (mp3's of new HOT bands, TV shows that are currently hot, and EA games(particularly MAXIS games (the sims stuff))).. it almost seems to somehow be related to money (ya big suprise).. try download the newest SIM game, try download the newest #1 selling music MP3, try download the current top 10 TV show your chance of getting tagged is higher (IMHO). Download "StarLost" (little know Sci-Fi show from Canada in the late 70-early80's) and NOBODY will care, there is no money to be made atm. he show is still under the same rules as any current movie/tv show, but right now, nobody cares because there is no DVD coming out (actually there is now).. but you get the point.
Also your provider can play a big part, my old provider (QWEST) wont matter what you do, download every movie in the theaters, they don't care, or don't ever say they do. But some have zero tolerance.
OK- I do not care what you do, I'm not for or against piracy, (well actually I have an opinion, but that wasn't the question). I am not telling anybody to do it, or how to do it. I am just pointing out what I have seen. I do not condone it.