Basically torrents allow you to obtain pieces of a file from people who don't have a complete download.
With limewire, someone needs to have the ENTIRE file downloaded to be able to share it.
With torrents, someone only needs a piece of the file to share it.
Anyway, I have an IP blocker set up for peace of mind, but also have protocol encryption enabled. Yeah it reaches less seeders because of the encryption, but I'd rather have that, then being unencrypted.
ISPs don't check on your activity. These anti-P2P companies track your IP, then notify your ISP, and then the ISP is obligated to deal with you. For all they care, you're paying to use their service, so why would they want to hunt you down if not forced to?