"That's a complete change of subject. I never said anything about fair use. We are talking about partial copy."
Right -- you claimed his quoting your post was infringement; I pointed out that this would actually fall under fair use doctrine in this instance. You're correct that it was not you who brought up fair use -- I did.
Specifically at what point does the random gibberish of a partial copy turn into a "work."
That's generally for the courts to decide. It's not as cut-and-dry as saying that you may distribute X minutes of a film that's Y minutes long (or insert Megabytes if you like). I think you already know this; you described it very well when you wrote "People think it's clear cut but it's really more a ball of wibbly wobbly law-y wawey."
Here's an interesting article on fair use as it applies to sampling music -- not quite the same as your question of how much of a movie you can distribute, but it should give an idea of the vagaries involved:
http://www.ivanhoffman.com/fairusemusic.html
"Wow 1 person doing two jobs and getting paid for each is a loophole? I think you need to look that word up."
This might be a reading comprehension issue. As I wrote, it's what many Slashdotters might consider to be a loophole. At any rate, the point is that they are not paid for each. You'll make more money per track sold if you write the lyrics for Song A and the music for Song B, than if you write both the words and music for Song A.
As for your question about why uploaders are sued, and not downloaders, it's simple: U.S. copyright law is largely about distribution. When we say "infringing copyright" it's a shorthand way of saying that we are infringing on the rights of the copyright holder; that is, the right to say how the product is distributed (I'm generalizing here but I hope you get the idea). Simply having a copy of a work that you didn't pay for isn't directly infringing on the rights of the rightsholder. Is that what you meant by a loophole?