Despite a minor security scare, Spotify is continuing to gather a major following after their UK launch - with a load more labels now getting on board (most notably Sub Pop). Still a few big names missing (The Smiths anyone?), but it's fast become a totally viable storage-free alternative to iTunes.
The obvious drawback remains not having the files on your iPod, making listening on the move a problem - but the big news hitting the nets is a possible mobile client, and as shown in the video an iPhone client (More info: Wired / Techcrunch). The best feature? The app is designed to cache music you have lined up, meaning there's music available when you drop out of signal range.
Of course, Apple may not allow the app onto the iTunes store, but they do allow Last FM on there - and even highlight it in their iPhone adverts on TV. Apple could, of course, launch a similar service themselves - and have recently begun offering season pass-type subscriptions, similar to Top Spin's business model. They'd probably need another round of negotiations with the labels, but with many indies now working as a fifth pseudo-major label that shouldn't be all that complicated (p.s. note, Merlin have our inside-man Matthew Herbert as their poster boy).
Some bands are even taking the matter into their own hands, with No Doubt giving away their entire catalog when you buy a tour ticket and The Presidents of the United States offering four of their albums in a handy app for $3. Ex-President Dave Dederer has even gone so far as to become involved in a company offering such apps, as well as the Nutsie service - which promises to deliver your iTunes music to your phone, other PCs and even Facebook.
That social networking aspect is integral to all these services - and sites are springing up all over the place allowing you to share your playlists and so on (1,2), but none can beat this old-school front end for actual browsing.