The initial reaction to iTunes Radio is that it is pretty slick. Seems easy to use and pretty similar to Pandora. Built into Apple TV too. Free with ads - and ad-free if you pay for iTunes Match. Starting in the U.S.
Eddy Cue giving demo of iTunes Radio. Can customize stations on request - even has Led Zeppelin. VERY much like Pandora.
Cue says iTunes Radio built into iOS 7 as well as next OSX update. Free with ads and free for iTunes Match subscribers.