Why isn't Kazaa shut down too?

They shut down Napster.
So how come other similar sites like Kazaa/Morphius, and Donkey shut down also?

Uh, that should say how come other similar sites are NOT shut down also.

Basically because Napster kept an active database of IP addresses containing MP3s to assist in people’s searches. Kaaza and Morpheus use what’s called a Gnutella network meaning that its all point to point. There’s no central server or service to shut down. They just rely on people who leave files available on their computers with an internet connection.

Actually, Kazaa doesn’t use Gnutella. They have their own P2P engine. Morpheus just recently switched to Gnutella.

Also at least one of them is located on an island in the West Indies.

They are all being sued by the recording industry. So far Morpheus, Kazaa, etc. claim they are merely distributing software to set up decentralized networks, aka peer-to-peer (as opposed to server/client) networks. They claim they have no control over what the users do with this software. Unfortunately Morpheus crashed a few weeks ago, demonstrating that there are central servers that control the activity of all users to some extent, so they may be in trouble. Checkthis Wired article for more information.

I have to ask, file sharing and laws aside, isn’t it, well, dangerous to give others access to your hard drive?

In theory it is, but the other users of the network don’t have direct access to your drive, only to the files that you tell the client/server software that it can access. And it can only READ files unless you (i.e. the owner of the machine) specifically download a file.