Creates free, effectively endless custom radio stations, streams them over 3G and learns more about your musical tastes with time. There is literally no downside to this app.
This one is a bit more of a companion app than the other radio services, in that it's accompanied by fantastic desktop clients, a rich website and plugins for Audioscrobbler—its recommendation system—for pretty much any music player out there. As far as the music goes, though, you're bound to find some new stuff here, especially if you don't mind more eclectic tunes.
From the App Developers: Listen to more than 5 million tracks for free with Last.fm on your iPhone.
Create personal radio stations based on any artist or genres, and listen to commercial free music for hours. With Last.fm on the iPhone you can also check out artist bios and concert information and share your favourite tracks with your friends using the iPhone contact list.