One of the most popular types of applications on the iPhone is the streaming audio player. Pandora has been at the top of the App Store before and looks to be the one to beat. The service I use and enjoy on my T-Mobile G1 is imeem Mobile and I was pleased to see it released for the iPhone because I think it does a better job of presenting me with songs I want to listen to much more often. imeem Mobile for the iPhone is available now on iTunes (iTunes link) for free.
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Last.fm streams songs in 128 kbps MP3 format, Pandora adjusts the stream based on your connection and goes down to 64 kbps MP3 on EDGE connections, and imeem Mobile streams the content in 64 kbps AAC format. While it may be good to go with the highest quality, you may experience lots of buffering and delays in getting the content to play. AAC is generally higher quality than MP3 so the imeem 64 kbps sounds perfectly fine and plays well on EDGE connections. I doubt most people know much difference when it comes to streaming music content anyways so wonder if you really need the highest quality for this type of usage.
I have been looking for another client because Pandora doesn't seem to always give me the variety of songs and songs from artists I really like and Last.fm sometimes has reliability issues. I've been very happy with the song choices on imeem Mobile on my G1 and skip a whole lot less than I do on Pandora. I guess Pandora is so popular because it is at the top of the popularity list, but I think there are much better clients that serve up more music that you want to listen to and hope people are open to trying out more of these clients.
A feature I don't think any other streaming application has is the ability to upload and then stream your own non-DRM music to your mobile client. You can upload up to 100 songs for free or pay for one of the two VIP tiers to upload more music. Your music is access on the MyMusic page of imeem Mobile.
It is easy to buy a song via iTunes from within the application, share songs via email, and control whether or not they are designated as a favorite.
I also really like the detailed information pages that are provided when you want to read more about the artists. Pandora and Last.fm have this information as well.
I hope Apple lets these streaming clients play in the background in the future.