From what I understand of the legal situation, and I am no lawyer, the organization is going to be a lot safer if it can claim to be hosting only fictional works. By which I mean no manips or vids (copyright issues are less clear-cut) and no personal journals.

Also, the level of complexity behind the servers of LiveJournal should not be underestimated. What they've ended up doing to make this site work has been adopted by most of the huge community sites on the Web, and it's server -- and therefore cost -- intensive.