Not retarded at all!!!
A German LAWYER has searched and found out that giving free copies to your family or best friends is perfectly LEGAL!!! I saw him telling this on TV, so it's not some vague article in a newspaper.
Selling them is ofcourse not :-)
There might be a legal hole on the German copyright acts, but I am pretty sure that is not the case on most countries (here in Argentina, LENDING your CDs is forbidden!). Ah, and just in case, do not believe in all you see on TV.
In The Netherlands it is totally legal to give a friend a bootleg/pirate cd whatever. Selling them is illegal. Swapping or giving it as a present is not illegal at all. I think that's how the situation is every where else in Europe as well.
In most parts of the world it is legal to give away and swap CDs. I give them as a present to my friends regularly. And as a collector I have swapped hundred of items. Go figure! ...And I'm talking of official material. The problem is when you make a duplicate and give that or keep that to yourself while giving the original.
By the way, bootlegs have no copyright licenses attached to them, as they are by definition unofficial recordings. (Of course counterfeits and other kinds of pirate discs might be violating the copyright of an official recording, but that is another story).