Well, this is a neat little service — BeatHound is a new service that allows you to upload your iTunes Library XML to their servers where it will be analyzed in order to provide you with awesome music recommendations. Once your library is analyzed, recommendations are sent to you via email. Right now, it takes a few hours before you receive an email with your recommendations, of course, mileage may vary depending upon the current queue of music libraries as well as the actual size of your music library.
Your iTunes Library file is used strictly to find new releases from artists in your library and for recommending albums you may like based on albums already in your library.
It also appears the service is looking to expand from just analyzing iTunes library files, a link on their front page goes to a survey where users of different media/audio players can let the BeatHound team know what they use. This is most likely so they can prioritize what other players to support and in what order they should support them.
Have you checked out Beathound? What do you think?