So this thread isn't for everybody. But personally, I keep my music on iTunes. I then put my music on my iPod, and when I want to switch what's on there I sync it manually. Which is often. I also have about 60,000 songs on my computer, so I can only ever have a fraction of it available if I'm not at my computer.
It's been coming for weeks, and I've been monitoring it because it's potentially huge for me, and they just announced it - iTunes will be in the cloud. You can download the music you've purchased from the iTunes store on any device for free, but even better than that, for $25 a year, you can do iTunes Match and have all of the music on your computer (even stuff you didn't buy from iTunes store, which for me is most of it) available to you on any device, anywhere.
So with my 32GB iPhone I can now access all 300GB of my music anytime. This...is really cool.
The only differences that I can tell are that iTunes Match hosts all your music on Apple servers somewhere - which is sort of a big difference because then your computer doesn't have to be on and connected to the internet at home for you to use it. Also that iTunes Match gives you 256kbps versions of your songs even if they're lower quality on your computer which is cool. I guess that's what you pay the $25 a year for.
Either way, I'll be using one of these services asap.