This isn’t a new question that’s been asked around. LimeWire is definitely 100% legal; however, putting copyright protected material without the permission of the copyright holder is entirely illegal. Thus, downloading and uploading copyrighted materieals should not be done by the users.
LimeWire is no different to other peer to peer software such as BitTorrent and Bearshare. These peer to peer clients simply make it possible for users to share their files over the web. Since these are called peer to peer, there is no centralized server where downloadable content are stored. Instead, content can be downloaded from other LimeWire users.

As you download a song or a video using this client, you may be downloading several bits and pieces of that media from several LimeWire users like yourself.

I had been using LimeWire myself and I had seen all sorts of downloadable stuff – yes, even copyright protected work and offending material can be found indiscriminately within that little piece of software. Since this software isn’t illegal, I have the impression that the user should be the one responsible in sharing content over these networks.

If you want to try out LimeWire for yourself, visit LimeWire website.
If you are interested in the legalities of LimeWire then it is best to take a peek on their copyright and safety pages:

• Using P2P safely
• LimeWire copyright page