According to a post on Wired, Cloudtrade has licensing deals with two labels... and UMG on the line.
http://blog.wired.com/music/2008/05/free-and-legal.html
I searched around and found some .cab files, funny vids, a few AVI's and some random photos. I also downloaded a few songs by Gomez and Ben Kweller. Free and Legal.
If anyone wants to test it out with me, my username is Dinex.