I use Spotify, but I also loathe the way it works. Their treatment of advertisements is just ridiculous (even if you turn down your computer a lot, not necessarily turn it off, they pause the ad). I can't wait for them to be outdone.
Spotify just seems like a lazy legal alternative to downloading your music for free. Google Music Beta allows you to upload your entire music catalog (up to 20,000 songs) to the cloud for instant streaming wherever you are. It's currently a free, invite only service.
I use spotify just out of convenience, because when I get a rec here or through last.fm (or anywhere else), I can just open my phone and add it to the playlist. So far there's very little that I haven't found, but if the only thing left in a few more months is the major label shit then what's the point?