What are the legalities involved with one of those TV episode sites that just make a website and embed illegal content, albeit from other sites such as youtube? Has anyone ever been sued etc It's not as though the site is hosting the content. Whats the worst that can happen, having to hand over the domain?
You could be sued for contributory infringement. "one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a "contributory infringer".
'Amateur' video showing on Youtube is freely available to use and embed onto websites - is this correct please?
This is exactly correct. If your in the US then make sure you follow all DMCA notices. here's a link for ya, I highly suggest you read it before taking on a site such as this. http://www.copyright.gov/legislation/dmca.pdf Code (markup):
I know it's "illegal" but are there any "real" cases. It's illegal to pinch a grape of the vine in a supermarket but...