2 questions about Music Copyrights

Had a few argueements about these… can anyone that knows the answer give a good reference?

  1. I am under the impression that if I go and buy a CD, then I can copy it to my computer or to a tape for personal use only, as long as I do not distribute (Fair Useage Act), but someone I know disagrees. Who is right, and what restrictions apply?

  2. A spinoff of question 1… if I buy a CD, and have it on my computer for personal purposes, can a member of my household (aka, wife or kid) listen to it without any laws?

Thank you in advance.