buying something and giving it to someone else is the same thing a gift. there is still only one copy of it, and the makers of it got paid for that copy. when you duplicate and redistribute it its totally different (uploading/download duplicates the material)
If i buy a book and give it to a friend nothing is wrong...i bought the book for my friend. If i read the book first and then give it to my friend this is still acceptable (it makes me a cheap bastard who gives used stuff as gifts but that doesnt affect the company that made the book, ok,well it technically does because they sold 1 copy and 2 people read it, but no law (that i know of) was broken during this process). If i buy the book, photo copy all the pages, bind it together and give the copy to my friend i just broke copyright law (something about unlawful reproduction) there are now two copies. if my friend pays me for all the paper and binding materials i used to make the copy does that make it legal? no you still broke the law in making the copy for him. You can argue you didnt sell it (though you did cause you accepted money for it) more accuratly you didnt profit from it. but in a sense you did (providing your duplicating costs were less than buying the real thing, which if it wasnt your an idiot).
so what the hell does mixing apple jacks, cheerios, and cinnimon toast crunch into baggies have anything to do with anything. your not making bootleg product. there is the same amount of cereal present after you put it in the little baggies as there was when you bought it. The amount of cereal consumed by you and your friends with the baggies is the same as if you had bought the three boxes and ate them all yourself while watching reruns of General Hospital.
It doesnt matter if you hate the MPAA or not, illegally downloading/sharing copyrighted material is illegal. If you do it through legit methods (ie itunes) its a different story.
-Darth Simon