Yeah, I use the similar bands thing to find new music, though I don't do it too often because of my slow internet speeds. Meh, it's still an awesome site, and I don't think it's as bad as Myspace or something, people only really use it for music (I hope).
Can you head full length clips of last fm? I went there once and I wasn't very impressed. A lot of songs you cannot get the full effect of by listening to a short clip.
Labels and bands sometimes upload entire songs up for people to listen to, but its only for a sample. Last.fm would be sued into oblivion if they uploaded entire songs for every band/artist without permission, which is why they stick to the 30 second clips.