actually, my roomate was caught downloading movies and he was given a stern warn and got his internet blocked for three days.
so yeah, it happens.
same when i was in the dorm except it happened to me, and i used a lot of precautions even; if i got caught again, they said it was possible i could be put on suspension from uni. torrents
were blocked when i got there (even a .torrent file or w/e would not dl in firefox or IE), but after messing with some settings i got some stuff to work. at another university in the state it made the news that a group of girls had been put on suspension there for downloading
tons of movies around a year ago.
so yeah, it can happen depending on the place but i'm sure they'll at least warn you before throwing you on the street
oh yeah, xbl was never blocked there yay