VPN’s are just a technology to allow secure communication over insecure networks. They’re used all the time for regular corporate communications. However, in addition to protecting your data from prying eyes, they also allow you to make your Internet connections appear to come from the VPN endpoint rather than from your PC. As such, they are used to get unfettered Internet access under repressive regimes, bypass country restrictions on services like Netflix, and hide/unblock torrent activity. So the tech is legal and widely available. The usage? No idea, probably varies.

You need (usually free) VPN client software on your PC, and some (probably not free) VPN endpoint on the other side willing to accept communication from your machine. I’ve never done this for recreational purposes, so I know the technical concepts but honestly don’t know what the options are. The truly paranoid might hop over multiple VPNs to better hide their location. The even truly paranoider might wonder why those people on he other end of their VPN are being so nice about encrypting their traffic for them, and if they happen to be a front company for some three-letter agency who could just read their unencrypted data before encrypting it. The question of who exactly you’re trusting with your data in the process of hiding that data from people you don’t trust can get pretty knotty. A secure system can often be compromised intentionally or unintentionally by a poor implementation choice that would probably be invisible to a non-expert. So enjoy your sense of security, it’s probably real. But possibly not.

Also, you’ll be fine downloading Harmy’s stuff, as everyone here has said. And 720p actually pretty well captures the available detail in the official Blu-rays, so 1080p won’t be a huge step up unless there’s another source with more detail than the Blu-rays. ESB (2.0) and Jedi (2.5) are both damn near perfect already. Star Wars is… really good with a few warts (get 2.7). What are you waiting for?