IIRC there was a man in (I believe) Austria who recently got arrested for this exact reason and he was trying to scrounge up enough in donations to pay for his legal fees.
Edit: http://arstechnica.com/tech-policy/2012/11/tor-operator-char...
Edit: http://arstechnica.com/tech-policy/2012/11/tor-operator-char...
+-----+
| You |
+-----+
\ <= encrypted _
+----------------+ | T
| Tor Entry Node | | O
+----------------+ | R
\ <= encrypted |
+------------------------+ | N
| Tor Bridge/Relay Nodes | | E
+------------------------+ | T
\ <= encrypted | W
+---------------+ | O
| Tor Exit Node | | R
+---------------+ _| K
unencrypted => \
+----------+
| Internet |
+----------+
The exit node is the only one that the wider Internet sees. All other traffic within the network is encrypted.