Audiogalaxy were sued in the same way that Napster were. The deal that they have done is that they will only have available on the site music which they have permission of the copyright holder(s) to have available. In other words, no more pirated Eminem stuff.
Napster didn't want to do this, they wanted to store everything they could get their hands on, but charge for access to it and pass a proportion of the profits back to the copyright holder. This was not acceptable to the RAA so Napster ended up closing where, hopefully, Audiogalaxy will survive.