I theory, any software which allows file sharing could be a security risk.
There are three basic categories of security to contend with:
1. Social engineering. A file might not be what it claims to be; so, for example, you might find a file you believe to be a screen saver, only to discover that it's actually a virus or Trojan horse. This is not software security at all; it's user security. If you only search for data files (such as music) and you don't copy or download executable files, you're okay.
2. Host security. This is relevant only if you're a host; that is, if you allow people to connect to your computer and copy files to or from you. If someone else is allowed access to your hard drive, and can upload files, there's always the cance that they can upload a destructive piece of software. Allowing access to download files from your hard drive is safer, assuming that the potential hacker can't find a way to give himself write permission to your hard drive; how much of a security issue this is depends on how the software is written, how you have it set up, and so on.
3. Security flaws in the software itself. These can take many forms; the most common of these is the 'buffer overflow" problem, in which a hacker sends a connection request or other datagram which is deliberately constructed in such a way as to exceed the amount of space in memory allocated for it, and allow the hacker to overwrite parts of memory or insert his own code into the software. Buffer overflow bugs can be difficult for a programmer to spot and fix, but they also tend to be difficult for hackers to find and exploit. In theory, any software that allows any access to a network whatsoever--not only server software but Web browsing software, peer-to-peer file sharing software, streaming music or video software--anything, is potentially exploitable if it has any bugs. This isn't a Limewire problem, per se--exploits exist for everything from Apache to SSH to Internet Explorer.
All in all, Limewire represents a very small security risk. The risk is bigger if you're aLimewire host, and of course, if you're only downloading and you're behind a firewall (such as a router), you're quite safe. I'd be more concerned about dying in a car wreck than having my system hacked through Limewire.