I for one have tons of software pirated, and I know its wrong in theory, but I just don't feel guilty about it. Stealing from Adobe or Microsoft is different than stealing from a Mom and Pop store or a small software company. Call it moral relativism if you want, but I make those decisions on a case-by-case basis. Now if I was actually running a company that was profiting from the use of that software, I would maybe be more inclinced to pay for it, since Adobe's work (or whoever's) would actually be making me money, but as it stands, its only for my own entertainment.
But in any case, I think paying $700 for Photoshop or $200 for Windows is outrageous. Even the price of games is too high, at around $70-80 with tax. Knowing that the majority of that money is NOT going to the hard working, 16-hours-a-day developers, but is instead being used to buy some lazy executive a new car, thats certainly a factor as well. Game developers are very hard working people, and yet they suffer in virtual obscurity, get payed very little fr their efforts, and constantly have some know-nothing publisher breathing down their necks to dumb down their games for the mass market.