Last time I checked (sometime late last year) the Karma Download web site [Update 2013: this address now redirects you a rather dodgy web site – you probably don’t want to follow that link] was displaying a message saying that they hoped to be back in action in a few days (I understand that they were negotiating with a potential buyer – or perhaps it was an investor).
But now I see that the URL goes to a domain parking site. So I suppose that the deal didn’t come off and Karma is completely dead. Which is a shame. It was an interesting site. I wonder what happened to the rights to the code. Maybe they could recoup some of the costs by selling it to another music download site. It was really well-written (of course, I’m a bit biased there).