According to an article on /., copying CDs for backup purposes and ripping music from CDs to your iPod, is not Fair Use in the eyes of the RIAA and they are going to try and argue that in court. Interestingly enough, they have previously argued the opposite, in the supreme court proceedings of MGM vs Grokster.
I will just say: The RIAA is being obscenely greedy. I will NOT buy a new CD just because a previous one broke. I bought the CONTENT of the CD, the media I listen to it from is not the issue.