Most people use Exact Audio Copy to rip CD's to MP3 format.
I belive there are apps for grabbing album art, but I don't see any need for album art, so I don't know of them.
Any good CD ripper can use CDDB to grab the track data from the net.
You can use Itunes or Napster to download albums from the net, but you will find them of inferior quality to a CD (they do tend to be cheaper though, if money is an issue).
Of course you can still use kazaa or any filesharing app you want. You just might get sued or get a virus. using a junk pc for grabbing mp3's won't really protect you from either, because you're going to have to connect it to your desktop to transfer the files over, and and any virus will come along with it. You're also still legaly liable .