So in the last week I've been playing with both Google Music beta & Spotify,
they are both great and have different strengths.
Google Music allows you to upload music from your computer, which can take a long time - but then you have access to those songs from anywhere you can log in to Google Music. Works on my Android phone too.
Spotify doesn't upload your music but allows you to play almost any song you can think of. In the beginning it was almost overwhelming trying to think of songs it wouldn't know. I would come up with something I didn't think would be in there and it would return more music by the artist than I even knew existed. In Spotify you can create playlists, I'm not sure if there's a limit to how many. It also has a social element in that you can connect with Facebook and see who you know is already using Spotify. If they make their playlists Public you can listen to their playlists - if you don't want anyone to see a certain playlist you can right-click it and un-check "publish."
Spotify invite via Klout