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Ongo Bongo: Netflix-style CD rentals

CDs

Danny Elfman might get on their ass about this (and he is definitely one guy you don't want to get on the bad side of), but a company called Ongo Bongo is offering a service where you can get a free iPod mini if you pre-pay for a year of their Netflix-style music service (which costs $22 a month, or $264 a year) which lets you "rent" unlimited numbers of CDs (i.e. up to four discs at a time). The initial catalog only contains about 20,000 songs (which means probably around 2,000 CDs or so, which is way smaller than even my dad's CD collection), but they claim it'll get up to 100,000 tracks soon. The only thing is, are CD rentals even legal here in the US? They've been a big thing over in Japan for years, anybody know if Ongo Bongo is in for a world of legal pain? (It'd probably be a good thing to figure out before you plunk down $264 for your "free" iPod mini, too.)