Corran007, I'm not questioning whether you own your music, I'm questioning why you think your employer should accept liability for its presence on their equipment in the first place. Why should a company have to deal with it at all when prohibiting personal use altogether is entirely fair and eliminates the problem before it can even occur.
A company is responsible/liable for every file on their system, so "your way of doing it" definitely does put a liability on the company. Usage policies are to prevent potential legal liability, and damage to their equipment, reputation, budget, etc.
You appear to be arguing that whatever you do with company property (the computer, the network, storage space, whatever), work-related or not, is owed to you because you happen to be employed there. If you're allowed to bring in your own player and use it, what exactly are you objecting to?
If you blatantly violate the usage policy you signed before you even got access to a company computer, you're not someone an employer should trust, no matter how well you do the job - what other rules are you willing to break because you feel they're unfair, or for some other reason, or maybe just on a whim?
The company policy prohibiting personal use is treating you as a professional. It tells you what's prohibited and the consequences of violating it, then it lets you decide whether you're professional enough to follow it - if you are, you're eligible to work there and if you're not... It's not a matter of the company mistrusting its employees, it's just good business. If there's no personal use allowed, the problems don't happen in the first place.
And note the date and time of my post you referred to - 5 Mar 06 12:56 (Sunday). Prior to that 26 Feb 06 22:23 (10:23 PM). Your last post was at 8:30 AM on Tuesday. Were you posting from work then?
I suggest neither of us will change our minds about this issue, and before it has a chance to degrade into flames, I will now no longer comment about this topic.