Marcia - 8:54 am on Jan 25, 2007 (gmt 0)

>>because the media file was shown within the website, hence passing it off as owned or licensed by that website.

That most certainly is illegal, and it most certainly is far from fair use as it can get. It's not only fraud, representing something as their own creation and property, it's a violation of intellectual property law. Same exact thing as motion pictures or recordings, for which there needs to be permission to perform them and there need to be royalties paid. The technology used may be different, but it's no different from Universal suing for their films being shown on MyTube. Or lawsuits for copyrighted celebrity photos being shown on fan sites being displayed by hotlinking or otherwise.

No one has the legal right to "play" a movie or streaming video or any other media creation on their own site unless it belongs to them.