Morpheus was originally part of the FastTrack family of clients - KaZaA, Grokster were the other two clients. Morpheus's claim to fame was that it had no spyware attached to it like KaZaA and Grokster did. This was only partially correct, as Morpheus installed Brilliant Digital's bde viewer, which later turned out to be spyware. But, for a time, Morpheus was the most-downloaded FastTrack client on Download.com.
Morpheus featured a built-in media player, ability to play partially downloaded files, ability to download the same file from multiple clients, and SuperNodes. Supernodes were computers with excellent Internet connectivity that served as 'hubs' for searches, thus decentralizing the network. Morpheus also featured rating of files, /msg'ing of other users, and automatic sorting of your mp3/avi files.
Since February 2002, Morpheus has gone a radical change. Because of failure to pay KaZaA licensing fees for the right to use the FastTrack Network, Morpheus has been kicked off the network by KaZaA, raising serious questions about how vulnerable the FastTrack Network is to legal issues. Upon logging into the network in Feburary, Morpheus users were presented with a dialog telling them that their client was out of date and that they needed to upgrade - except that there was no upgrade for Morpheus available. As it turns out, KaZaA released a new version of their client, which quickly propagated throughout the network, locking Morpheus out in the cold. With Morpheus's FastTrack demise, a significant faction of the network was lost.
Morpheus quickly released a "Preview Edition" of its client, which showed the open-source nature of the GPL. As it turns out, Morpheus's Preview Edition is simply nothing more than an old fork of Gnucleus, which uses the Gnutella protocol, with advertising and spyware tacked on to help pay Morpheus's bills. Indeed, the creator of Gnucleus, on his main page, said that he wished Morpheus had contacted him first. This "Preview Edition" has been met with wide derision on Download.com and various news sites; Morpheus's rating sank from 90% to about 78%. Reports of 56k acting like a 300 baud modem, inability to find a file, general slowness, and advertising have all taken their toll on Morpheus's reputation.
KaZaA had taken advantage of this fact by posting a big banner on their main page inviting dissatisfied Morpheus users to come on over and take advantage of the (somewhat smaller) organized FastTrack network.