clayj said:
Functionally, there is NO difference between someone "downloading" the file and someone "streaming" the audio from the file... the net result in both cases is that the bits from the file are going to that person's machine.
Indeed. And, more specifically, the net result is that you have allowed someone in the public to listen to your song without you having a license to do that. You can stream audio--"internet radio"--without holding complete copyright to the audio, but there is a special licensing system in place specifically for that. Look it up on Google--there was a big court agreement a little while ago.
Going back to the rather silly example about the car, the reason you can get away with it is because the other listeners are incidental--you're playing it in what is considered a private location--same as listening to it at home--which you're licensed to do. Likewise, you can invite friends into your car or over to your house to listen to it--that's also within your established rights.
However, if you play that music in a public place with the intent of others hearing it--over a loudspeaker, in a restaurant, on the radio, over the internet, or at a movie theater--you're now publicly performing the piece, and in a whole new category that requires various specific rights (for example, if you have a restaurant, you can't just put on a random CD). Likewise, if you play it in a private location, but charge money to get into the performance, you're doing exactly what a theater does, and that's also a new category.
Technically even the car thing is probably illegal in some way but absolutely nobody is ever going to prosecute it unless you start charging for parking spaces next to you or something, just like a lot of small restaurants play music they're not supposed to but nobody really cares because, if nothing else, in most cases the copyright holder isn't even aware that the music is being "performed" "publicly".
I'm not a copyright lawyer, so I'm probably wrong about some of this, but it's pretty close at least. Stupid, also, but then a lot of laws are.
So in answer to the original question, like everybody is saying it's fine on your private iDisk and probably also within Apple's TOS, but put it on your publicly accessible space and it's likely illegal and almost certainly against the TOS in any case.