Grooveshark already does everything listed. And it's been available in the USA for years. The only problem is their iPhone app has been continuously rejected by Apple so they've been forced to publish for iOS on Cydia's store for jailbroken apps. That and licensing/litigation issues with some large recording companies. They have deals with a few and have been through court with others.
Grooveshark is great and since moving the US I've used it a lot. Where I think Spotify wins out over Grooveshark is the quality of their music library. I frequently find that albums on Grooveshark are missing tracks, in the incorrect order, or are incorrectly named. I guess it's a little thing but it feels like a big difference.
I don't think Grooveshark is a very good product, but I'm not crazy about Spotify either. Last time I used Spotify (about a year ago) they didn't even have the ability save albums to a collection or library. You could only create playlists which turned into terrible UI once you had more than a few. Not having a web interface is also a major minus in my book.
Grooveshark allows you to build a library of music, favorites, playlists, follow friends, find and buy concert tickets from Artists page through SongKick (YC 07), listen on your mobile device if you have Grooveshark Anywhere. Their other paid plan, Grooveshark Plus gives you access to early features before they're rolled out to the normal users like their desktop client, visualizations, Last.fm scrobbling, no limits on library + fav size and more.
If they can find a way to fix their content quality problem and licensing issues with the RIAA, they have a really bright future. They're the most innovative company in the space right now and I think it would be a damn shame if they were forced to close due to different recording companies constantly suing them and turning back on their settlement deals. Having to deal with EMI, Sony Warner MG, Universal and their ilk separately is part of the problem as well. The reason their iPhone app got pulled from the App Store[1] was because UMG filed a new copyright infringement lawsuit against them Jan 2010.
You have to understand they function quite similarly to how Youtube works and is obligated to follow the DMCA.
The thing with Spotify is the 'adding albums to your collection' model isn't one they're keen to promote. The idea is really (as far as I can tell - and I've been a full-price paying user for a long while now) that you have this HUGE collection of music always available, and if you want to listen to an album - you search, then there's playlist support as well.
You can ofc save albums as a playlist on their own - and this is quite well supported, but personally, after the first 10 albums I'd saved there, I have never found it to be very useful.
Sure, every subscription music service has search. It's essential, but navigating their entire library and navigating just stuff I like is not the same. Some times I just want to browse my favorite artists. I can't do this effectively on Spotify. The user experience here is bad. I don't think I'm the only person who wants to "favorite" albums.
All saved music lists in Spotify has clickable Album, Artist and Track links so in effect you can easily make "Album" lists. I have done that for ages.
Grooveshark is user uploaded which means duplicates, fakes, bad tagging (so the "same" song might have widely different total times). Use Grooveshark if you like trial/error in your music listening.
I've been using it for more than 3 years and have noticed lots of duplicates in searches like you mention, but the flagging feature has removed virtually all crappy songs. I bump in to way fewer of these types of tracks now than in 2008 when it was called Grooveshark Lite. The vast majority of songs are great quality. But I agree, there are lots of duplicates and bad tagging around.
Another upside to user uploaded content is that Grooveshark has a massive library of available songs. I have found the most obscure artists in different languages on Grooveshark. I listen to a lot of music and artists and there are very few musicians I haven't found on Grooveshark.
