Piracy has been and will continue to be an issue for the video games industry, and I’m sure you’ve at some point pirated a game (or downloaded a car). There is a lot of research on PC-based piracy and sites like The Pirate Bay make using torrents to get pirated games really easy.
Over at Delta Gamer they take a look at the often-forgetton world of console-based piracy and provide a brief overview of the history of consoles and pirated games. Totally worth a read.
The Dreamcast was free from piracy for the first two years, until the infamous Boot Disc 1.1 by Utopia was released. It was an astonishingly simple process: you put the Boot Disc in, waited for it to load, opened the lid, put in the burned or imported game copy and played. That was it. Within a few months, various rips plagued the Internet, as well as the first self-boot, Dynamite Cop, being released.
Many cite piracy as what killed the Dreamcast. I always found that claim beyond absurd, as piracy was extremely widespread on Sony’s consoles, and yet they never “suffered” for it. But don’t listen to me, I urge you to read Xiaopang’s article on the subject. It goes into great detail about how piracy came to be on the Dreamcast, the circumstances, the consequences, as well as other useful details.