In most countries uploading copyright material is considered illegal
Nope, in most countries is legal

What steps are uploaders taking to reduce the risk of getting busted?
protect your link with url shorter or some sites gives to you the option to mark the link only for registred users, or even only for JD download

1. How do you purchase an account from a filehost and receive payments from them without giving away your identity?
I don't know... but there are no problem with this... is not illegal sharing files. Don't worry

2. How do you conceal your identity when you post files on sites ?
Idem: I don't know... but there are no problem with this... is not illegal posting things that are not illegal

3. How do you pay for VPS and RDP ? Can you use a proxy so that the VPS or RPD do not know who you are?
you're paranoid? don't worry about this!

4. I see soo many people requesting & making payments via paypal...this can't be safe?
Is not very safe. Sometimes Paypal blocks uploaders/hosts/filehosts accounts. Payza, wmz and others are better

I have to make a few hundred dollars a week unless I know I am protected
Don't worry men... just don't upload real illegal things (like child porn)