Kazaa uses peer-to-peer (P2P) file sharing -- the same type of technology that made Napster famous.
But unlike Napster, which distributed content via a centralized server, Kazaa uses a decentralized system. Kazaa users contact one another directly online to share content. Kazaa's decentralization is one of the main reasons why it has weathered the legal firestorm this long.
To transfer data between users (peer-to-peer), Kazaa uses the FastTrack protocol. FastTrack is a so-called "second generation" P2P protocol. The system divides Kazaa users into two groups: supernodes and ordinary nodes. Supernodes are powerful computers with fast network connections, high bandwidth and quick processing capabilities (computer owners don't know that their computers have been designated as supernodes). The approximately 30,000 supernodes on Kazaa act a lot like traffic hubs, processing data requests from the slower ordinary nodes. Each supernode may serve between 60 and 150 ordinary nodes at one time.
When a user installs the Kazaa software on his or her computer, it comes coded with a list of supernodes. Every time the user launches the Kazaa application, his or her computer registers with the central server and then chooses from a list of currently active supernodes. When the computer sends out a request for files the user wants to download or upload, the request is funneled through the supernode. The supernode communicates with other supernodes, which in turn connect to regular nodes that in turn connect to even more regular nodes, to fulfill the request until the Time to Live of 7 runs out -- this means that the search request will extend seven levels into the network before it stops propagating. Once the correct file has been located, it is transferred directly from the file owner to the requester using HTTP (HyperText Transfer Protocol) -- it doesn't have to go through a supernode.