I am wondering if anyone knows of a good cheap filehoster where I can store around 3GB of music and videos. I would also like to (probably not even legal) be able to give links to other people to download/upload. Am I setting myself up for a lawsuit or do people do this?

Thank You

People do it, only problem is, if you ask me, is that you are asking the wrong type of people... I dont exactly agree with "IT", I am a musician myself, and would love to see the proper personel recieve their proper royalties. So it really depends on you... Are you planning on dispursing royalties/copyright fees? If so, Then it is completely legal. However, anyone(no offense) that has to ask that question, is probobly in the wrong venture.
However, If you wanted to contact the proper agencies, how much are you looking to spend per montho for this hostiing? You will need more than just a high volume of space, you will need MASSIVE AMOUNTS OF BANDWIDTH! So check it out, let me know, and i will be more than happy to help you out.
-G

You can do that with Streamload.com. They let you have 10GB of storage on a free account, but the catch is that other "streamloaders" have to frequently download your content to keep it fresh, otherwise it will get deleted. I don't believe the paid accounts have this restriction. Anyone you share with would need a Streamload account as well. XDrive.com has a similar service. Do a google search for "file storage".

If you don't have permission to distribute the music, then it's illegal.