When it comes to iPhone — it's either love it or hate it at&t

Spotify for iPhone

Simply rocks. I stopped using iTunes. Plays over 3g network while driving in excellent quality. Not sure what the bit rate is over 3g but it has to be at least 128kbps. (It's 320kbps on desktop with Premium subscription.) Songs start playing almost immediately, thanks to Spotify P2P setup that downloads the beginning of the file first.

You can also store 3,333 song on the iPhone itself in so-called offline mode.

Tethering on iPhone with 3.0

No jailbreak required, just point your iPhone Safari browser to help.benm.at

Works over bluetooth or cable.