The camel's back has been broken. Because of the label's stupidity, this trial will un-do a lot of the stuff the labels have been pushing for over the years. It will not only stop the trend of more restrictions dead in its tracks, but also reverse it. Megaupload will bring the necessary attention to the labels' abuses of DMCA and their other proposed bills, and we'll probably going to end up with laws that strengthen our online liberties.
It's important that we don't let this happen in a bubble. We have to show that citizens are behind Megaupload (in this case). The recording industry has no qualms on speaking on behalf of public interest, and I can imagine they'll suggest the public would prefer censorship with false positives than to risk "hurting musicians" through piracy.
If there have been other cases where artists have had music taken down by recording labels that did not own copyright, now would be a good time to bring them back to light.
While we are fighting the recording companies, why not put pressure on the people that give them power: the artists themselves? UMG is speaking on their behalf, acting on their behalf. If they are going to play the musicians card, why not strike back. It's one thing to hear the music industry wants to silence your speech. It's another thing when your favorite artist supports the same efforts.