As of today, you can play full-length tracks and entire albums for free on the Last.fm website.
The service also is boasting "the most complete, licensed music catalog" in the world with support from The Big Four music labels as well as over 150,000 indie labels. It's all immediately available on demand without logging in.
Gizmodo calls the updated version "internet radio on 'roids, basically."
The free (banner ad-supported) service has the limitation of only allowing the same track to be played 3-times. But Last.fm will soon be announcing a subscription service that will allow for unlimited plays as well as "some other useful things."
"We’re also working on bringing full-length tracks to the desktop client and beyond," said the company. It's that "beyond" part that I think folks should keep an eye on, as Last.fm could very well do what Slacker is doing.
Last.fm was acquired by CBS for $280 million in cash in May 2007.