There's a lot of misinformation in this thread, gonna try to clear some things out. (Based on EU clients, assuming the US ones are the same(?))
Their
business model is completely stable because they are largely a subscription based service, the free version is pretty limited in the amount of music you are alowed to listen to as well as with the ads, you pay 5$ for premium desktop service and 10$ for additional streaming quality as well as a mobile app.
You can
browse genres through
advanced search.
You get to
album view through clicking on the album title in search/artist/radio, if you want to "save" the album for easier access or to download it if you have premium(/unlimited?) through dragging the album/all the songs onto the add playlist button.
Starring is a favorite feature that adds it to the top of your profile as well as the starred tab over the playlists, it's basically just a playlist to hold your favorites.
The
social part works like this: you have a profile, you can
link other people to your profile and other people can search for it through typing spotify:user:yourusername in the search bar (only desktop afaik). Your profile displays all your playlists, what it automatically thinks is your favorite albums/tracks (works crappy though) and your favorites. You can choose to hide these if you want.
Facebook connect just gives you a list of all your facebook friends profiles.
Comparing it to
youtube is laughable, spotify is a replacement for
itunes and is miles better than both of them when it comes to music.
Playlists are incredibly dynamic, examples:
-sharing playlists is easy, as well as
sharing tracks/albums, just right click on it and
select copy HTTP.
-You subscribe yourself to other peoples playlists.
-You can create collaborative playlists for everyone to edit.
-
Radio features are available, at the top of the left bar for genre radio, in the top tabs in artist view for related artists radio.
The
prices ARE unfair for europeans, but we always get higher prices on everything so just deal with it. (we have healthcare so we're better anyways

)
Bottom line, spotify is an extremely powerful online music service and a good offline music player, better than anything else i've tried. I've been a premium subscriber for over a year now and i've used it for two, during this time it has developed immensely and except for the fact that they crushed the previously "too good to be true" free service (Restricted amount of time/month, restricted amounts of listens/track) they've never let me down.
Also, i guess i probably have some european invites, pm me and i'll get back to you in a few hours or so.
Stuff that i kinda dislike:
A bit to much focus on playlists, would like to have a better view over albums and artists for my local files.
The mac client has a laggy scroll. (a la steam)
No social on mobile.
No ipad app so far. (iphone works OK tho)