Napster kept the shared files on their own servers. That's the big difference and why they were so easily sued.
The gnutella programs, including Limewire, let clients share the files that are on your own computer. They basically work like a clearing house. You get to choose what files you want to share with others on the network and that's a good thing because you don't want to give random access to all your files to anyone. Most of them come with irritating ads and some come with spyware that keeps track of your internet activity. Limewire wants you to pay so you can be ad free, ya right. You also have the peer-to-peer programs like IRC that let's you trade files from individuals. There is still the old way of doing it too if you still have a modem, you can call your friends computer directly, share files and not be on the internet. Windows hyperterminal and ah yes, Qmodem hehe.