seems like the solution is to have a dedicated lap top to pirate your illegal downloads, and just wipe it often.
Theoretically, I'd use a laptop with a generic USB wifi dongle. Virtualize the OS, snapshot the sterile OS, download to USB device, blow out snapshot when done.
Or use a live disk, which is probably easier for a home user.
The guys who know IT better than me can give you a long list, but some examples are: stealing your contacts for spammers, tracking where you go on the interwebz, setting you up as part of a bot net (a bunch of computers unaware they're being used to forward spam or viruses (among a host of other unsavory things)), to keylogging your passwords. For starters. :)
Well they can have my passwords. Last I looked my bank balance was -1.63 dollars. I never ever open anything like "you need this plug in" Don't download anything, just stream.
I know this is going to sound judgmental, but you are engaging in illegal and risky activity. Copyright infringement is against the law. It's not really justifiable either when you have libraries. Plus Netflix, Amazon Video, Hulu, etc. Heck, YouTube has plenty of free content. You could be sued, which would drive your bank balance quite a bit below -1.63. Ignoring what malware can do to you (everything Ben said, plus plenty more like identity theft), you could help infect other machines, or contribute to botnets. Sometimes you don't have to worry about the bullet with your name on it, but rather the one that has "To Whom It May Concern". There is no justification other than "My wants are more important than anything else."
Your life, dude.