Pirating is way overrated. Part of what businesses don't understand (they refuse to stand it anyway) is that they believe everyone who pirates the same could have bought it (and this is very false).
Pirating is only bad when the product is bad or when the product is not launched in difference parts of the world on the same day. If the game is released in North America first, that gives a really good reason for anyone in Europe to download it (seeing as they may have to wait 3 months and they probably think pirating is the answer because the publisher overlooked them - that makes them look less important). This is just bad for sales and does a really poor job in building a solid and loyal customer base.
If the product sucks, people will pirate to see if they like despite the bad reviews because this gives them the oppurtunity to get as much fun out of the game before it becomes boring (very often it does if the game is really bad) or they just delete the game 5 minutes after they first installed it. It's hard to say that in any of these cases that you would have had made a successful sale anyway.
Then all you have left is the buyer who 'would have purchased' but downloading it off emule or an ftp site was just more convienent. Well, Stardock has done a good job to influence this crowd as well. It won't get all of them, but it will get some (in the same Blizzard gets people to buy starcraft, diablo and warcraft).
There are a lot of people that download a game, only to delete it a day later. This happens so many times around the world that it's very hard to justify these lack of sales. To be honest, if pirating wasn't available at all, I doubt you'd see a major increase in valid purchases of the title as opposed to a world with pirating.
There are also some cases where pirating works to your advantage. For instance, many people probably downloaded Warcraft III to play the single player and then loved the game so much (and had the largest urge) to go buy the game just to play the multiplayer. So if your product is good and possess high quality, you really don't have a lot to worry about because if you have that service oriented, value-add on top of the original product, you will get this free advertising and get more sales. I'm sure blizzard can tell you all about this.
That's what I have to say about pirating.