Just off the starting blocks, WE 7, is a UK based online music service (backed by Peter Gabriel) that offers Free Legal Music Downloads. Use the tracks on any device you would like. The artists get paid. How? Each free track includes an ad. 
WE 7 also offer tracks from the Womad (World Music) and Chelsea (Classic, Jazz) Festivals.
Since the service is new, the selection is still limited.
Peter Gabriel Talks about WE 7 with the BBC ‘Digital Planet’
I was reminded of WE 7 start by Springwise.
Recent adventures in Sound: Budweiser counter cultural ads, Beastie Boys, Sonar