Can someone fill me in on the first step a client (BT) would take to find its first peers? That part is a bit magic to me right now. What would be the first IP it would query and how would it know?
1. Use a cached list from a previous run. This is ideal in terms of load balancing, and also helps with bootstrap time if your IP hasn't changed, so all major torrent clients have such a cache.
2. Ask peers you're connected to via a traditional tracker and .torrent file. This is the next best thing, but can only be used if the first torrent you download is via a traditional tracker.
3. Use some bootstrap peers hardcoded into the torrent client. Has a single point of failure, but it works.
Each torrent client can use a different set of bootstrap peers, note - they're nothing special, just a DHT peer that has the bandwidth and CPU power to deal with bootstrap requests (which isn't a very high hurdle - you only get hit once, on the initial install, or if the client's been shut down for so long it no longer has any valid peers). Or the user might even supply their own, if need be.
To clarify, if someone has never downloaded a torrent before and starts with a rarely downloaded file, would the use of only magnet links mean they will probably not be able to find another peer? It sounds like unless you already have torrents downloaded, your list of possible peers to check for the file is very short.
Although this is quite the extreme case, and not really the purpose for Bittorrent to begin with, I guess. The main interest is load balancing of popular downloads, not finding the one person with the one file for you.
Of course, TPB switching to magnets doesn't really affect this. Torrent files are still used to provide information on the download, they're just distributed from within the P2P network instead of TPB itself. If you have a torrent file to share with an individual or small group instead of the whole world, there's no reason to stop using torrent files directly.