When you upload a song, you upload only the notes.mid and song.ini. The song.ini must have the Title, Artist and Album filled in.
When you go into the download section, the program scans your computer's iTunes/WiMP/whatever library and searches for songs within your library within its database of uploaded charts. You pick one of the songs to download a chart for and it displays all the charts that are available, along with what instruments and difficulties are charted and a rating for that chart (based on user votes). You pick it and it downloads this chart (which should be very fast, considering it's just the mid and the ini), then converts the song from your library into an ogg, and puts the mid, ini, ogg and the album art from your library together into a single, game-ready folder which is placed in your FoF songs folder.
Now your probably planning to say that the sync will be wrong, and I have thought about this. Next it would go to a syncing screen. There would be a watered-down EOF-like interface, ideally with the song's waveform, showing the chart. You just drag the first note back and forth (the whole chart moves with it) and play it through a few times until the first note is approximately in the right place. Assuming the original chart is in sync, then you only need to get the first note right and the rest will fall into place. Then there'd be a second stage to get the sync more precise:
* If the program was part of FoFiX (and not an external program) then the song would start and you can play it (possibly at a slower speed, and/or on an easier difficulty, if one is present). It keeps track of how early or late you played each note, and tries to find a trend. Obviously, if it finds that you played most of the notes too early, it will conclude that the chart must be too late, and will lower the delay in the song.ini to compensate. The game would interrupt you as soon as it has enough data to make a reliable conclusion. (the slow speed and/or easier difficulty would minimise the effect of inaccurate playing on this conclusion)
* If it is an external program, then the same sort of thing would happen in a (very) watered-down version of the game (i.e. just 2D or EOF-like 3D graphics, and no fretting; just strumming).
As well as being perfectly legal, there are other advantages over Tune Posting:
* Low download size (just the mids and inis) - this makes a big difference in countries that still have download caps, like where I live

* Searching your music library ensures that you'll find music you like
* More convenient than Tune Posting (well, I think so).
Obviously Tune Posting would remain for career packs, songs like those from Smart Apple (is that the right name?), and people who can't be bothered with being legal.
Am I just being naive to think that people actually care about legal issues and want to minimise download costs and are prepared to spend a minute to sync each song?