If 'Hollywood' could prove that the software companies were making these programmes in order to promote and improve illegal forms of file-sharing, then it'd be pretty hard for them to fully defend against a lawsuit on that matter. Just as Raistlin has said.
However, the comparison with the firearms industry is a good one, I think. I'll ignore Second Amendment arguments, since that Amendment is only relevant within the US, and treating it as an unchangeable "right to bear arms" is just about the worst example of statutory interpretation I've ever encountered. Goodness knows how they keep getting away with it...

But that's not the point.
Both weapons and file-sharing software can have a lot of different applications and uses. The overall purpose is the same - all firearms are made to fire a high-speed projectile into a target; all file-sharing programmes are made to enable the distribution of electronic data. It's the specific application of these uses that is the problem.
A weapon can be customised and 'improved' to make it more effective as a murder weapon. This could include silencers, laser sights, compact (and thus, concealable) designs, amongst other bits of fine-tuning. Similarly, programmes can be cutomised to make them better for sharing illegal files. I'm not savvy enough to list such improvements, but I know that stuff can be done for this purpose.
It all depends on what the manufacturer intends, or knows, people are going to do with the end product.

But basically, if you make a product that's intentionally designed to be used for a specifc criminal purpose, then you're at least partially responsible for the outcome. (I've never had any time for arguments like "gun's don't kill people, people kill people". That always makes me want to say, "A-bombs and land mines don't kill people, people kill people, so I should be allowed to mine my yard and build a silo in the garage").

If someone's losing a shedload of money they're fully entitled to, as a result of file sharing, then it's within their rights to take legal action. Particularly in the case of small-time publishers, whose profits depend entirely on a small number of artists. Musicians might also foreseeably suffer as a result of having their work distributed in that same way.
Thus, while the issue doesn't affect me and I don't really have an opinion on it, I can fully understand people wanting to sue over it.
If they win, then fair enough. The law needs to protect intellectual property rights or creativity will eventually suffer, as people turn away from entertainment careers because of low revenue. This is not a severe problem at present, but if it got worse it could become a serious issue.[q=edczxcvbnm]I pose this question, if hollywood won does that set a new standard to be use like in such cases as the gun industry?
[/q]Nah... the principles are broadly similar, but they're different enough that one wouldn't necessarily follow the other. Gun laws directly affect people's health and safety, while file-sharing doesn't. Besides, the NRA owns enough politicians that the US will never have to worry about a significant change in gun-control laws, even though most of the public want more restrictions. A lot of people argue, "but if you make guns illegal then criminals will still own them anyway". My response to this is, that if you make gun controls tighter, then (1) there will be fewer guns in circulation, thus fewer will end up in criminals' hands; (2) it'll be easier to remove firearms from people who shouldn't have them; and (3) the rest of us won't have to keep a lookout for every drunk hillbilly staggering down the street exercising his "constitutional right" to carry a sawn-off shotgun for "self defence".

A similar analogy to filesharing can be found in the case of drug manufacturers. If a pharmaceutical company sells methodone, morphine etc to a hospital, then they can argue they're not responsible for any subsequent misuse of their product. When you sell to a hospital, you can reasonably presume they'll be responsible. However, if that same company sells a crate of medication to Cletus from Alabama, they'd have a harder time arguing 'reasonable care'. Again, the issue is what the company intended, and what they knew would happen to their product in that instance.