Whatever info your ISP gives up you also have the right to look at, file a motion for discovery if you have to to obtain it if the ISP doesnt voluntarily let you have it. Yes someone can use your machine as a proxy. Whether or not your ISP has detailed enough records of the actvities in question is kinda unlikely, and more than likely the MPAA has a very weak case(they usually do). If all they have is an IP address and zero packet sniffing records to show actual proof of file transfer then if you fight it you stand a pretty good chance actually. In order to show definte proof your PC was involved in the act of transferring a copyrighted file they would have to have decoded packets that constitute an actual copyrighted file OR catch you in the act of seeding a protected file as in seeding a bittorrent file, and Im pretty sure this would have to have several witnesses as well as definitive proof thru the ISP.
I can tell you right now that despite zone alarm or any other protection you may think will help, your box can be hacked, and usually quite easily, they are numerous holes in almost every OS made. Almost any common ftp server can be hacked, as well as several ways thru internet explorer,active X, etc etc etc There are quite a few websites with scripts and tools for those that are less creative and persistent when it comes to breaking into systems that make it quite easy to hack most boxes, you can root just about anything, and unfortunately windows in all its forms is basically pretty vulnerable. I thinks its kinda rare that just an out of the blue random hack would happen to an end user with a broadband connection but im sure it happens, my system logs show numerous breakin attempts everyday.
