1) Pandora! Pandora! Pandora! This app is awesome and I'm sure most of you know about it. Although unfortunately, just today I read an article about how they might be shutting down, which would REALLY suck. I would pay for this service if they went that route.
Pandora isn't available outside of the US, neither are most of the other similar services.
2) I've found a mobile site where you can basically search and stream any song. Its awesome and I use it often.
I'm guessing because you haven't given a link that is isn't exactly a legal option.
3) This is the one that basically made me have my revelation and write this post:
Simplify Media. This amazing little program will stream your entire library to your iphone, with album art, artist info and lyrics. WHAT. THE. F. Its definitely got some initial issues but for the most part, Simplify Media has been consistent for me. The really cool part is you can invite other people to see your library and stream their stuff just easily easily as you stream your own.
The Simplify site has a wonderfully simple claim of "it's legal", which I can't help thinking is a over simplification outside of the US. Expect legal cases in various countries if this becomes popular.
Also, if it becomes popular then expect 3G networks to get a lot slower. If you streamed 192k MP3s for an hour long commute, I made that about 3.5 gig of data transfer a month. That would exceed the usage limits on many "unlimited" plans over here.
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