What does grokster mean for free software? How can this be related?
Remember that Grokster is a for-profit company that distributes a proprietary P2P application. Since the software only comes from the company, it can be destroyed by destroying the company (id est through legal action against the company).
Contrast this with a F/OSS program like bittorrent, which is based on an open protocol. Since the protocol is open, there are many implementations, so each developer would need to hunted down individually by the MPAA/RIAA. Grokster must operate legally in the united states if they are to collect money from americans. As long as servers exist outside of the US, illegal software can still be developed. Exempli gratia LAME versus Fraunhofer.
Could pirates continue to use proprietary software? Yes, but KAZAA has taught us not to trust proprietary software. People trusted grokster because a company stood behind their product and guaranteed that they would not bundle spyware.
The only reason that we trust Microsoft Office not to contain spyware is that MSFT has so much to lose if they were found out.