After having faced the legal wrath of the music industry, popular peer-to-peer file-sharing service iMesh has seen the light and has gone legit by rolling out a software update today that will let it charge users to download music.

The service, which gives users access to more than 15 million music files through the Gnutella networks, will cost $6.95 a month for a "tethered" subscription service, meaning users can only listen to downloaded music on their computers for as long as they subscribe to the service.

iMesh will also charge 99 cents per song if the user wants to both "own" it and be able to burn it onto a CD. In the next few months the company plans to roll out a portable subscription service that lets users transfer downloaded music to a portable music player.

iMesh is offering the legal service free for 30 to 60 days.

Some songs from independent and unsigned artists, as well as from those who have not asked iMesh to block them, will remain free. But all other unauthorized files will be restricted in the latest version. iMesh is using filtering technology from Los Gatos, California-based Audible Magic.

iMesh, founded in New York in 1999, will then pay a portion of the subscription and per-song fees to the record labels.

"This marks a major step forward for consumers in their desire to legitimately access a massive pool of music over peer-to-peer networks," said Talmon Marco, iMesh's cofounder and president.

The big question is whether iMesh can now go legit by convincing its 5 million users to pay for music that has been free to this point.

Marco told MP3.com that iMesh will use the free introductory period to slowly wean its users off the old system. Users who upgrade to version 6.0 will be able to keep using the system for free for the first 30-60 days without providing any registration or contact information, he said.

"The biggest challenge that services like Napster and Rhapsody face is that users have a great barrier to entry--they have to pay to experience the service," Marco said. "iMesh users won't have to do that."

The public beta is the culmination of a lengthy process that began when the Recording Industry Association of America (RIAA) sued iMesh for alleged copyright infringement in 2003.

It settled the case in July 2004 by paying $4.1 million and agreeing to produce a version that would block users from trading unauthorized copies of songs. In return, the RIAA allowed iMesh to continue operating as a free service until it was ready to unveil the legal upgrade.

The unusual settlement agreement bought Marco and his team the time to create a legal version of iMesh.

In the time since they started that process, the legal pendulum has swung even further in favor of the music industry.

In June, the US Supreme Court found that file-sharing services Grokster and StreamCast could be held liable for copyright violations by their users. Within weeks, the RIAA began sending cease-and-desist letters to other P2P services like WinMX and eDonkey. The former has shut down while the latter has said it intends to either do the same or go legit.

Meanwhile, popular P2P service Mashboxxx, created by former Grokster president Wayne Rosso, is expected to release an industry-supported version later this year.

The new iMesh service will look familiar to longtime users, though with some vital alterations. Once songs are downloaded, even when paid for, they can't be transferred to an iPod or other music player. They can only listened to on the computer to which they were downloaded.

The interface will come with social-networking tools to help users find other people by age, gender, geographic region, or musical tastes. Those tools were designed with the success of hugely popular community site MySpace.com in mind, Marco said.

Marco said he has been encouraged by the numbers he's seen in the 24 hours since the company first announced the new version.

"We're telling our users, 'Have fun, enjoy it, and don't worry about money,'" he said. "We're seeing very nice numbers in terms of usage. It's been very encouraging."