I don't know how typical my situation is, but I find that piracy is more or less an unavoidable neccessity for me if I continue to take an interest in accquiring gaming products.
I live in a little college in the middle of nowhere, and I have no access to any real transportation to anywhere that's useful from a gaming standpoint. I have no access to any local gaming stores, friendly or otherwise, or even any bookstores within a radius of at least twenty miles. Aside from summer and winter break, I cannot buy hard copies of any D&D books. As a result, the internet is wonderful for me- most of the gaming companies sell .pdf versions of their books, and I can even find .pdfs of old 2E or 3E out of print products which even a good bookstore wouldn't usually carry.
But for all their advantages, online .pdf stores have a major disadvantage- there's no way to 'try before I buy', no way to leaf through a book to get a sense of what the quality level is or if it will be of any use to me in my campaign. Reviews from other people can only go so far- what they value in a book isn't neccessarily what I value. With some products from some publishers, I know even without looking that it's what I want. Snagging something like the Draconomicon or some of the old Planescape line is a no-brainer, and totally worth the price. With others... well, if I download Unveiled Masters or the Book of Exalted Deeds or the 2E Psionics Handbook and find it lacking, I can't exactly take it back with a reciept and ask for my money back. The lower cost of .pdfs helps to mitigate that, but if I downloaded anything that looked interesting, the costs would still add up.
As a result, I snatch pirated copies of these .pdfs off of the internet, leaf through them so I can decide if they're what I'm looking for, and then either delete them or delete and go find a store online where I can buy a legal copy. This way companies that produce stuff that's good still get my money, and I don't wind up supporting products that I never would have paid for if I'd been able to look at them properly before purchase.
For big name publishers like WotC or Mongoose and the like, the lost revenue from the people who don't pay back for the pdfs they keep is negligible- most of their money comes from the sale of the hard copy books anyway... and it's potentially arguable that some the people who are pirating aren't always customers anyway and wouldn't buy the product if they couldn't get it free. For small publishers, who make their earnings largely or even solely off of .pdfs, the problem is potentially greater.... I know that not everyone pirating does so for the same reasons as I do or is as honest about paying for stuff as I am, but until companies find some way to solve the "sealed box" problem of online pdfs, I don't really see an alternative, at least for me. I don't really have any suggestions as to how to deal with it- if you make things more piracy-proof, it's usually only a delaying measure- sooner or later someone will figure out how to get past it.
I'd really like to see someone somewhere do a study on if revenues are being lost as a result of piracy, and if so, how much... if anyone has seen any data published about this already, I'd be interested.