It looks like Grooveshark is in a heap of trouble, according to this article in Ars Technica.

A judge found that Grooveshark employees were encouraged to upload thousands of songs to the service. As far as I understand the legality, if users upload it’s OK for Grooveshark, but it’s pretty obviously a copyright violation if employees of the company are doing it – especially when directed by management. This violates the basic rule of thumb of copyright law: Don’t redistribute other people’s stuff without their permission.

There’s still a lot of great music sites out there (which Replay Media Catcher and Replay Music record from nicely). But Grooveshark is one of my favorites.