I agree that the price of some albums is higher than you would get in a real shop but there are albums that are cheaper than the shop price.
You also get the convenience of buying online coupled with being able to preview the tracks you're interested in and are able to buy just the track that you're looking for.
On the other hand iTunes doesn't yet have a large enough catalogue (well for me anyway), there have been many times where I have searched for something and haven't been able to find it.
iTunes has the advantage of built in podcast support, synchronising seamlessly with my iPod (not just the music but calendars, address book, to do list, photos and e-mails). It has a liberal DRM system (listen on up to 5 computers at once, put it on unlimited iPods and burn it onto unlimited CDs. Sound good to you??). The compression used is miles better than MP3 and it's dead easy to share your music over a home or uni network.
I don't know the particulars of the Microsoft system but considering Microsoft's track record (XP activation process), the DRM is going to be painfully restrictive and probably use WMA which is an inferior "standard". Also it probably won't have the same level of support for podcasts and iPods as iTunes does (simply because they're made by different companies) but you can't rule it out.
Some people use the best, some use the cheapest and some are lucky in finding that the cheapest happens to be the best.
Time will tell which one will win out.
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