torrentfreak.com has acquired a document how a british company is tracking down illegal use of P2P: This is How We Catch You Downloading.
Basically they use a modified P2P client which searches for infringing content, download it and if that works and is indeed is the content then they do a whois on your IP and send a infringement notice to your ISP. The best thing is that they claim that this provides enough proof that you really are infringing.
They probably never heard about botnets.
Yeah, some recent research has them sending notices to printers and other stuff.