More DJs are turning to MP3s for their prefered music source. While you can't beat match or scratch yet, that will be able to be done soon too.Makers of MP3 players have noticed the trend and have begun to make specialized equipment for them as well.
Pioneer & Gem Sound are set to release products for the professional DJ. One digital DJ, who works at a club in Broolyn, NY, uses two of Apple's iPods. The 2 ten gig drives are each smaller than a pack of cigs and he simply plugs them into the mixer.
Using MP3s is not illegal, but can be. It depends on how the music is acquired. Converting one's own music to MP3 format is perfectly legal under the Digital Millenium Copyright Act. Purist DJs still scoff at the technology as do purist in the crowds http://www.cnn.com/2002/TECH/ptech/07/27/digital.disc.jockeys.ap/index.html