I've been meaning to post this for a while.
Anyway check this thing out: http://www.mediaservices.ru/
Basically you pay $0.01 per meg of music, or get unlimited access for $15 US per month but of course they limit your bandwidth to 25KB/s.
You can encode your stuff on the fly (usually between 128/384 kbits) - it seems straight from the source.
Of course, "ru" means that the server is hosted in Russia (Moscow in particular) so RIAA can't touch them. Yet.
I've put down $20 on my account a few months ago, they are still there. So they are not going to cheap you out. I downloaded a few albums and they are excellent quality..