I think http://amiestreet.com might solve a subset of Zed's problems (or, perhaps just the "you can't charge for your music" problem). On AmieStreet, a song starts free or cheap, and rises in cost as its popularity grows (capped at 98 cents per song). AmieStreet has a "REC" system that is similar to PopCuts' fan-revenue-sharing model that "thetable" mentions in these comments, somewhere. On AmieStreet, when a fan recommends (RECs) a song, and from that point on it continues to rise in price (and in popularity), they put money into your AmieStreet account. The site also suggests music based on your previous choices, you can preview everything, it has a player widget built in that will allow you to start previewing one album while browsing to other artists on AmieStreet, etc.

AmieStreet is a really great experience, for the fan. I cannot testify as to the experience for the musician. I could see not being able to set your own price point as annoying. Artists do keep 70% of the proceeds after $5 (so, AmieStreet is still a middle man), paid quarterly.

AmieStreet's Wikipedia entry is short but interesting. (http://en.wikipedia.org/wiki/Amie_Street#cite_note-ForArtist...)

I have not used PopCuts, but I'm checking it out now.

EDIT: For the record, I have no affiliation with AmieStreet, other than being a user. I do have a bit of an infatuation, though.