if you own a ps3 and didnt know about this already: shame on you!
to clarify, you can share just about anything downloadable from psn, including things not in the store (beta invites and such). for games that have a blu ray version out as well as a downloadable version (burnout, warhawk...) you need to have not only the owners account saved, but also there password. so if they change there password, then it will no longer be able to work.
also, for all DLC, it needs to be from the region of your game. So if you imported soul calibur from japan, the downloadable content must be from the japan servers.
as far as which games are shareable, its a safe bet to assume all games are shareable. ive yet to come across one that wasn't.
this is indeed legal, and sony will no way infract you for sharing games. they built the store to work that way. its a nice little addition in my opinion.