This isn't anything official as it would have been submitted by an everyday internet user, but it seems accurate:

Taken from UrbanDictionary.com
n. . software that is no longer sold or supported by the original publisher / developer, often found as free downloads on the internet because it cannot be obtained elsewhere. Not legal, but often seen as morally acceptable because the company that made it is no longer selling the title, nor releasing it as freeware, therefore abandonware is "keeping the game alive", so to speak.

eg. Doom II is not abandonware because id still sells it, while The Incredible Machine is not sold, therefore is abandonware.
Seems it is illegal. I guess what I was describing in my previous post was just another form of Freeware.

EDIT: Going by the above, I think that it should be legal for people to download abandonware, as otherwise it could be seen as impossible to purchase. It's an interesting ethical debate.