Sort of. There's no desktop software for the Rhapsody iPhone app. But playlists you create on Rhapsody.com will show up on the iPhone app, and vice versa. So, really, it syncs without any wires.
But then if you want to download that playlist (or song, album, whatever) to play it offline (as opposed to streaming) you have to tap a download button in the Rhapsody app on your iPhone. Not a huge hassle. I prefer it because I hardly ever sync my device. (I hardly ever synced my Zune either. I just downloaded right from the Marketplace on the device. Rhapsody is better at this experience.)
True. But if you're only using Rhapsody with one device, it's $5 cheaper. (I always forgot to use my Zune song credits anyway, again, because I hardly ever used the Zune desktop software.)