How Does Peekvid Work?

Good question. The site, which reminds me of the good 'ole free days of Napster, has no reference on Wikipedia, and my brief Google search didn't reveal anything of substance. I found this comment on a blog which discusses intellectual property law. The substance of comment essentially corroborates what I've been saying all along:

The interesting thing about peekvid is that it is taking advantage of the inherent problem with the whole idea of Web 2.0. The idea behind peekvid is to basically intentionally make the file name so random that unless someone knew it was there no one would be able to find it on their servers (since they wouldn't know what to search for). Then the person who made up the random file name,'encoded' information, then places the 'decoded' file information on a different site. I don’t know who is liable in this case. I had the notion that the site that hosts the file is liable which would make peekvid perfectly legal. Is it illegal to direct someone to illegal content?

Let's hope this anomalous loophole is enough to keep Peekvid (and its copycats) online for many years to come!