"Mercora's mission is to catalog and organize the world's music and make it universally searchable and legally listenable." Sounds familiar?
Mercora is a radio network that lets everyone create a radio station and stream music in a P2P fashion (people can't download music). You can invite your friends and listen to their music, search for an artist and find all his albums or just choose a genre. Mercora lets you discover similar artists, read biographies and add comments.
The software, Mercora IMRadio, has a social side, as you can log in with the username/password for an instant messaging client (Google Talk included) and invite your contacts. You can create a profile, interact with other users, share photos and much more.
Regarding copyright, Mercora says: "you can webcast any music that you own legally. These recordings must originate from an authorized source (either created originally by the artist or record label that owns the copyright), and are not unlawful copies that have been downloaded illegally or obtained from an unauthorized third party."
Mercora IMRadio is a freeware for Windows 2000 and Windows XP. It uses an open source format for streaming (OGG Vorbis) and it depends a lot on network connection speed, so you may notice buffering problems.
Related stuff:
Vibe Streamer - personal MP3 server
Hype Machine - music search engine
Winamp moves to the web