((UPDATED - No launch as of 6PM ET Thursday) When we wrote about ReDigi's plan to create a marketplace for used digital downloads, it caused quite a stir.  Could selling used downloads be legal? "A legal music download is generally issued as personal license to use," wrote attorney Rob Falk, "and I believe that by its terms, is non-transferable." Not so fast, countered the company who said they've created proprietary tech that makes resale possible and legal. With ReDigi's launch today, and the subsequent outcry that's certain to come from record labels, we'll get a chance to find out who is right.

ReDigi’s argument for legality lies in technology, the ReDigi Music Manager client (video demo below), that enables a music file to transfer from one user to another without allowing multiple copies to exist at the same time.

“ReDigi’s technology signifies an important transition in the digital space, beyond the scope of what anyone thought was possible,” CEO John Ossenmacher said in a statement. “By allowing consumers to sell their used digital music, we are giving digital goods a resale value for the first time ever and opening a new realm of what is possible in the digital age.”

What do you think? Is ReDigi legal?