As a songwriter myself, I have to laugh.
I'm a firm believer that in order to make money, one should actually have to work (not a fan of the "interest" industry either). Recording an album is not only easy (to those musically inclined), but it's fun. Not a lot like work. With today's technology, you don't need to spend hundreds of thousands getting it done.
What can musicians do to make money that IS like work? Get off your ass and go on tour. Play shows. You can't pirate a live concert experience (well... you could sneak in). You play your live shows, you sell your T-shirts and logo'd g-strings, and if you're lucky and I REALLY like your work, I will buy your albums every time. I support the artists I love. I "try out" artists I'm not sure if I'll love. We must get to a point where the album is the advertisement for the live show. This will not only widen exposure for the little guys (more people will listen to your album if you give it away), but it will serve as quality control, blocking the hacks and the record company creations. Word of mouth will be king. I can dream.
In the interest of putting my money where my mouth is, here's my band's first album (which GAF will probably hate).
http://www.megaupload.com/?d=OHMGC77X
If anyone cares, I play lead guitar.