We knew it was coming, but now the Slacker internet radio app is officially available on the iPhone.
I've played with it briefly, and the experience has been fantastic so far. Because Apple does not allow caching like RIM does with the BlackBerry, the content is streaming—but the music plays back well even when you are on EDGE (and the coverflow-style switching was smooth). The app is free, but if you don't have a Plus subscription you will have to deal with the occasional advertisement and a skipping/request limit.
Slacker Mobile for iPhone:
• Free music library featuring millions of songs
• High-quality stereo playback from any wireless connection
• Over 100 professionally programmed genre stations
• Create custom artist stations
• Fine tune stations to play more of the music you like
• View artist biographies and photos
• View album art and reviews
• "Peek Ahead" artist and album preview
• Pause and skip songs
• Rate songs as favorites
• Ban the songs and artists you don't like
AU: Unsurprisingly, this one's not on the AU iTunes store...