zaalmoetlos: i've only glanced through your post, but a few things stick out:

II- They are selling music downloaded from Kazaa and other P2P networks: To build up their music library of music files, they downloaded them from P2P networks and then re-encoded them.
what good would re-encoding them do? surely the sound quality is only going to be as good as the source, so if they downlaoded a naff copy from kazza then it will still be naff once re-encoded

III - JetGroove is not British, but a Russian company:
a- They are renting a British address in London at "Douglas Company Services", http://www.douglas-cs.co.uk/, to show they are legit and an English company.
lots of legit companies do this. i cant see what the big deal it. do you personally have a problem with russians?

V - Their website has been built by the following Russian webdesign company http://www.suponix.com which is using the same tricks as JetGroove to fool people on where they come from. They are a Russian company from Odessa, Russia, and try to show they are American.
i dont see how this has any relavence to the record industry

VII - Be aware that there is a rumour of scam for credit card details.
probably started by another online record store to further put of potential jetgroove clients. i cant possibly see how anyone could have spotted such a fraud this early on into jetgrooves business (especially considering they didnt even have any stock for sale)

i've read all the threads on jetgroove and to be honnest i think that its been 70% hysteria and 30% fact.