Any copyright lawyers lurking?

As long as you don't make a profit with it, there are no Copyright infringment.

What I do know is that none of us owns the music we purchase regardless of format, we only purchase a perpetual license to listen and non-monetarily share or make copies under strict non-profitable terms and conditions by the publisher. Also, the public playback of published music is subject to these same terms and conditions. Yes, you do own the piece of vinyl or the aluminum coated with polycarbonate disc, but you do not own the content on it. There has always been the issue of how this is managed when buying used CDs and records, the consensus being that the license was already taken by the original purchaser and is simply being transfered to the new owner in the preowned-media sale. I am not a lawyer but a licensing professional. Counsel may wish to weigh in here.

Even if your friend owns a legal copy of the work, giving him a non-legally purchased copy is an infringement of the copyright holder's interest. When you purchased the record you did not buy a license to distribute the music on the record in alternate formats. It doesn't matter whether money is involved in the exchange.

Once it becomes a DIGITAL item, the digital copyright act becomes a part of the equation. And i am certain it is not legal to transfer a digital copy of an item. Period.
I most certainly will not land you in jail, today. but the fact of doing it opens you to all sorts of theoretical problems lawyers love to charge big bucks saving your butt from.
One cannot resell a digital copy, even if you bought it, under the current act.
Loaning a digital copy is also verboten. (loaning the original download is OK, but only if it is still in the form and equipment you downloaded it to. so you would have to give the harddrive, or original files container of whatever sort to the other person, and even that is iffy.
And even if you made the copy, you do not own the copyright to the music.
Fair use is pretty much an unknown with digital stuff, and considering the DIRE penalites in the digital copyright act, i would be pretty quiet about doing anything.
I am not a lawyer.

Thanks for the replies. My initial feelings on this issue were closest to what Elizabeth so eloquently stated. I originally told my buddy that he could bring his albums over and record them for his use only. It does create an ironic inflection point whereby fair use of the purchased analog record could/might be superceded by the Digital Copyright Act...or vice versa. Who knows and I assure you I don't care enough about this potential pitfall to be a test case!

Thanks all