I took a listen today to last.fm. In comparison to pandora, it has some definite strengths. If you create stations on the band "Blue Rodeo" in both of them, the results are very different. Pandora picks up on the country aspect of Blue Rodeo's music and takes you down that path. Last.fm, picked up on who they sound a bit like and I think with whom they've toured, so bands like Great Big Sea, and the Jayhawks were coming up as well as artists like Simon and Garfunkel and Tom Petty. To my ears, this is a better match, so last.fm may have the better algorithm, however they do not have the better library.
My favourite station on pandora is "Theolonius Monk." This consistently delivers excellent jazz that for me is very listenable. Attempting to create this station on last.fm yields a "Not enough content to play this station." I am still torn between these two.