I had another, lower-fi, idea yesterday in the car on the way to the airport that could supplement the idea of distributing music through local wifi networks. I call it "Give-a-Disc, Take-a-Disc":
Since I first discovered podcasting back in December or January, I've started to accumulate a pile of CDs that I've listened to once and never plan to again. What happens is that, since I haven't yet iPod-ed my car, I end up burning CDs of podcasts that I want to listen to in the car (or at work, or any other non-headphone-safe zone). Then they just sit around filling up my room and occasionally tempting my housemates into bending them until they explode into clouds of dangerous shards.
The library (or some other public place, like a cafe) should set up a system where people with content-filled discs that they no longer want can drop them off to be found by people who are looking for something to listen to. The things have gotten so cheap that it would be like the Give-a-penny, Take-a-Penny system at convenience stores, a kind of physical analog to online peer-to-peer networks. To bastardize a phrase from Nicholas Negroponte, we would be 'trading atoms in order to trade bits'.
In the midst of all the work to get cultural products to flow freely through the web, it's easy to forget that most people still find their music, books, and movies on little bits of plastic and trees floating around out there in the world.