1. I was hesitant to use the word 'netizen' as well; I think it's lame too. However, I went with this decision because currently only the Internet users who have a large presence on the BBSes (the ones you have to telnet into) have raised any audible concerns; I felt "Internet user" doesn't really cut it. If you have an alternative, I'll be happy to hear about it.
2. Unfortunately you're right about the general Taiwanese attitude towards IP. However, that's probably because the recording industry here isn't as ham-fisted as your RIAA, who seems to be suing everybody in sight. That doesn't mean it's never happened before, though; a few years ago a student was sued for uploading MP3 files at my university.