Here is a user linking to apparently illegal material:
How should we deal with this issue?
I think we can restrict the discussion to unauthorized online copies of copyrighted books. (If you have other similar things in mind please comment so we can add it to the list but for now this seems to be sufficient since we haven't had any other related case AFAIK).
My intention for asking this question was not about legal issues (as I have stated in my answer below) but how we should deal with these (links to unauthorized online copies of copyrighted books). Do we need a policy? If yes, what should be the policy?
Update (Jan. 19, 2011):
I have posted a draft policy here.