Spotify is a desktop-based streaming music service, currently only available in Europe. It's in beta, invitation-only mode... (Unless they *think* you're in the UK, tehee!) You download their widget thing, register, and start listening.
I would say it's less like Pandora and more like unlocking the iTunes music store. You can skip with abandon (including to the middle of songs!), repeat segments of songs, make playlists, listen to radio stations stratified by decade, etc. etc. etc.
According to them:
"Spotify offers you legal and free access to a huge library of music.
Why do I have to install Spotify?
By installing Spotify as a stand alone application you get a much better user experience and audio quality compared to web-based sites.
Do I need to pay to use Spotify?
No, the advertising-funded version of Spotify is free of charge, however, for now it requires that you receive an invite to register unless you are in the UK. Visit our invitation page to sign up to the waiting list. Alternatively, you can pay for an ad-free premium subscription to Spotify.
What countries is Spotify available in?
Spotify is currently available in Sweden, Norway, Finland, the UK, France and Spain. We hope to launch in more countries in the future.
Can I scrobble the music I play to Last.fm?
Yes, Spotify has built in support for last.fm that can be enabled from the preferences menu. For more details have a look at this blog post.
How do I get new invites?
Getting invites is one of the benefits of being a Premium subscriber in one of the countries where Spotify Free is available. You receive two new invitations each time your Premium account is renewed (yearly or monthly, depending on your payment method).
So it's awesome, but if you're not in the UK it's kind of pain--you have to proxy in. TECH CRUNCH has an article on how to try this now, no matter where you are. Pretty simple step-by-step, I recommend it. Nothing like a fake Yorkshire postal code and no commercials to make one's afternoon.