Apple has introduced a music-streaming service called iTunes Radio that'll be found natively in the upcoming iOS 7. For now, the service will be right in the Music app on iOS, and will offer up a series of featured stations (including, for the demo, a station playing the music heard at WWDC). Just tap on a station, and you'll get music from it. You also can choose to star songs to hear them again, play more songs like this or choose to never play a certain song again.
The service is completely free, and supported by ads (presumably driven, as expected, by iAds). If you're an iTunes Match subscriber, however, the service will be completely ad-free, so that's a nice bonus. For the moment, there appears to be no offline play available, but we'll check and see if that's the case. iTunes Radio will be a feature in iOS 7, which is coming to the iPhone and iPad sometime later on this year.