What if Napster was cleared of any Copyright infringement based on the grounds that all mp3 files shared were paid for by the consumer who released their music onto the network.
Today in the alternate 2008 Napster and the downloading of mp3 files is free and 100% legal.
This is a bit ASB, you'll probably have to have a quite early POD to weaken the 'industry', or have half a century of much more idealistic congressmen in the US, and MP's in Europe.
If the copyright laws aren't quite as draconian as OTL, I might see non-commercial sharing be covered by fair use. Of course, Napster still needs enough funds to defend themselves in court, so the whole juridical system must be changed as well, probably to something like: The prosecution must first prove the validity of their claims before the defense even have to show up in court, or the industry can just sue Napster so many times that they cant afford to pay for legal advice (OTL Sony did this to Lik-Sang with success).
Now, if file sharing becomes perfectly legal in the mid-90's, the world would probably progress as it did, but with less interest in politics by the pirate community, and thus probably less manpower for anti-patent, civil rights, and other liberal movements. This could have far reaching consequences.