All of the content at these sites is legal to download and distribute, no worry about copyright legalities.
A large, and rapidly growing amount of content in BitTorrent is legally distributable, even though it has a reputation for illegally distributing copyrighted content. Much of this is issued under a Creative Commons license which allows you to copy, distribute, advertise and play as long as you give credit to the artist. Some also allow altering for mixes as long as credit is given to the artist.
Most of this content is music audio and is from up and coming artists. There are some current movies from independent producers, but most is older movies in the Public Domain. There is some content from mainstream popular music, mostly live concerts, but a few popular artists have released their content over BitTorrent.
All of the content at these sites is legal to download and distribute. I have never heard of a fake or infected torrent at these sites (but I suppose they could exist) and there is no worry about copyright legalities.
In addition to these sites, any torrent search site will index legal torrents. A search for public domain, open source or creative commons will usually bring up a substantial list. Any Linux distribution will almost always be available also.
This list is not complete but currently contains about 15 sites for legal (and free) torrents. If anyone knows of other sites they feel should be on this list, please leave a reply below.
Academic Torrents – a distributed system for sharing datasets – for researchers, by researchers.
Archive.org The Internet Archive has opened its torrents section, which offers over 1 million items from its collection for free download through torrents. This collection includes (as of August, 2012) 1,225,491 ebooks, 127,383 items from the music and audio section of the Archive and 9,674 videos from the movies archive. This collection will grow rapidly as all new entries to the archive will be offered as torrents and older entries are being added continually. In my test of a few of the torrents, download speeds were excellent. The Archive is seeding all content.
BitTorrent Now New! mostly music with some video and audiobooks. All available through torrents. Though put out by BitTorrent, any BitTorrent client may be used.
C. Dominik Bodi has each of the 24 promotional CDs of Baen’s free science fiction novels available in ISO.
FrostClick an impressive collection of free music, games, software, movies and shows offered under creative commons license.
Linux Tracker bills itself as the Premiere Linux BitTorrent Website and hosts around 500 torrents of free and open source software, preferably Linux.
Media History Digital Library a collection of works regarding the history of cinema, broadcasting and sound. If you click on the link to the Internet Archive page (IA), a torrent is available for each of the library offerings.
Panda.cd is a private site featuring creative commons and artist permission releases of music. Their collection has grown rather large. Registration is open.
PlaneShift a 3d fantasy MMORPG that is free and open source. Cross platform downloads are available free through torrents. Registration, with valid email, is required to play the game. There did appear to be at least one web seed available, so speeds were good.
Public Domain Flicks New! offers a collection of free public domain movies for free download through torrents. All appear to be through Archive.org and its web seeds.
Public Domain Torrents is a collection of classic movies and B-movies that are in the public domain. The collection includes approximately 1,000 movies that are available in DivX, iPod, PDA and PSP. Speeds are generally a bit slow.
The Mercury Theater On The Air an excellent collection of shows from the classic radio drama, famous for the War of The Worlds broadcast, but also responsible for some of the best radio dramas ever. A torrent of all the material is at the bottom of this page.
ThePaulWayMixes Paul Way released 52 of his mixes for free and legal download through torrents.
Vuze. As of June, 2009, Vuze now carries only videos. This is a small collection of some TV shows, movie trailers and news clips. All are available for free download with any BitTorrent client.