From what I've read, the download limit will apply to what's shared rather than the individuals downloading it. So once the 1GB traffic allowance is reached for someone's files, nobody can make any further downloads of these files until tomorrow.
For example, if someone shares out a 50MB file on Rapidshare, then this file can only be downloaded 20 times on a given day before the limit is reached for that day (20 x 50MB = 1GB.) This means that 21st person to try downloading it will get a "Download limit reached" error for that file, where as that person can still download someone else's files that haven't reached the 1GB traffic limit for the day yet.
Think of it like the difference between a monthly traffic limit on a website hosting account and an individual's ISP monthly download allowance. A website with a 10GB monthly traffic allowance is quite different having a 10GB/month traffic limit on an individual ISP account.
I'm sure RapidShare is going to struggle even for legitimate use once this limit is enforced. I've often downloaded stuff that was shared out by RapidShare, most often being freeware software. While a 5MB to 10MB size may not seem like a lot, all it would take is 100 to 200 downloads a day before the limit is reached, making RapidShare practically useless to even host small software packages.
One thing I'm surprised about is that RapidShare will also enforce a 25GB daily traffic limit on files hosted on a premium account. But then again, many website hosts do have a 100GB to 1TB monthly limit, which works out at roughly 3.5GB to 34GB per day.