Stands for "Peer to Peer." In a P2P network, the "peers" are computer systems which are connected to each other via the Internet. Files can be shared directly between systems on the network without the need of a central server. In other words, each computer on a P2P network becomes a file server as well as a client.
The only requirements for a computer to join a peer-to-peer network are an Internet connection and P2P software. Common P2P software programs include Kazaa, Limewire, BearShare, Morpheus, and Acquisition. These programs connect to a P2P network, such as "Gnutella," which allows the computer to access thousands of other systems on the network.
Once connected to the network, P2P software allows you to search for files on other people's computers. Meanwhile, other users on the network can search for files on your computer, but typically only within a single folder that you have designated to share. While P2P networking makes file sharing easy and convenient, is also has led to a lot of software piracy and illegal music downloads. Therefore, it is best to be on the safe side and only download software and music from legitimate websites.