Radio will be built into the iDevices. That right there wins them 10mil users who are too lazy to download an additional app. iTunes sucks but it works and its consistent so they lead the industry.

Pandora style services are the future. Very few people will waste time building play lists and buying music when they can just create a station and listen to their favorites and other songs they haven't heard or that are brand new. I have a couple thousand individually purchased songs in my iTunes library. I only buy the tracks i like. I haven't purchased a song in over a year. I never use the iPod app on my phone. I only use Pandora now. If Radio is as good or even close ill drop Pandora.