If you are an ISP, or your clients are ISP's then you might need to know what is keeping them up at night. Here is an interesting analysis of what uses up an ISP's bandwidth, produced by CacheLogic. It appears that most bandwidth is used by peer-to-peer (P2P) services - remember Napster? The rest of the web's traffic is negligible compared to P2P file-sharing, much of which is legal, so it's not just music and videos. Jarche Consulting: Peer-to-Peer
So what if ISPs acted as super-nodes in some of these p2p systems? Much like traditional caching, this would enable them to share the load, keeping traffic on their network, and thus reduce their costs.
But would this make ISPs liable for any illegal content in their p2p cache? My non-lawyer brain immediately thinks: of course not, it's exactly like running an HTML cache that might contain illegal content.