Updated Sep 15th
So it seems like there is currently no way to play pandora on the touch. There are however some good alternatives that work with the Skyfire browser.
1.
Last.fm *RECOMMENDED* - actually has a lot more selection and diversity than pandora. also allows you to play any song at will, unlimited skips, and make a playlist. I think you can only make one station, not several like pandora. This is a great one for international music (gotta have my zouk)
2.
Jango.com *RECOMMENDED* - very similar to pandora and with more options. Also lets you create several stations and play songs on demand. Also lets you customize song discovery (only popular, diversity, or in the middle). Another cool feature is that when a song is playing you can choose out of several songs to play next. Interface works very well with skyfire.
3.
Slacker.com
4.
Live365.com - Lots of streaming radio in a flash player.
Without Skyfire it seems like we can only listen to streams such as can be found on
Shoutcast.com
Thanks to all that contributed to this thread, a lot of these i've never heard of before. Please keep on sharing if anyone knows any more.