I realize this thread's old,but it can't hurt to add to it for the next Guy & what I've read so far seem to be rite on the money, but thats just My opinion.Understand what I'm about to add is just My interpetation of what I've read over the years but I'm like 99% sure that it too is rite on the money.
Charter Communications(CC)is a Cable ISP & most likely IS in league with what I'll call the Copyrite Van Guard & yes I guess it's possible for Your ISP to see what's on Your PC but Dude only if Your totaly slippin man.
Basicly You'd have to have Your Shared-Folder shared out to the whole world.
But as long as You have Your XP-Firewall or Your Routers Firewall configured correctly then the only (program/process/ip) that would be able to access that shared folder would be a user of a P2P client like Limewire,Frosty,ect & once limewire's designated to use a set of ports then no other process can send or receive data thru those ports except clients that are part of the Gnutella Network & if You have all Your ports closed except for the ones limewire uses then Your ISP can not see into Your PC.
However if You connect directly to a client/ip who is a proponent of the Copywrite Van Guard then of course they too would be able to see what You have in Your Shared Folder.But after all You connected to em(Slippin Again).
So this is where Peer Guardian comes in handy, because it keeps a Black-list of known Proponents IP's & helps You by not allowing You to even connect to em let alone share with em.
However one thing Your ISP can see is the dynamics of the Bandwidth Flowing to or from Your PC as well as it's destination & since each file-type(avi,mp3,rar)has it's own very destictive looking set of packets, then Your ISP can accurately deduce what type of file/s Your Downloading/Uploading (via Bandwith Throttling Software)
So if Your ISP can tell what type of file Your downloading & if it goes on for hours then its pretty obvious to Your ISP what your doing.
But there is a piece of software that will encrypt/decrypt data packets that are sent so that Your ISP's Bandwith Throttling Software won't recognize the files dynamics that are Downloading/Uploading.
Only problem with this idea is that the encryption software must be installed at both ends(sender & reciever)so that data packets can be sent encrypted & received decrypted & at this point not every one is using the software.
I would add that new users need to do alot more reading before they run out & buy a PC, 3MBps of speed,install limewire & start sharing files.Because copywrited files are all over the Gnutella Network & to think that any one of us won't end up with a copywrited file on our PC is straight lame.
So Lock it up & if You don't know how to Lock it up then You need to read & learn how to Lock it up NOW!!!