I've been messing with the Itunes radio lately and it's kind of creepy how right it is in anticipating what I like. I'm sure it uses a lot of algorithm stuff including knowing what you have in your own iTunes account to decide for you.
Example. I like Shinedown. I create the Shindedown channel. I add Papa Roach, Bullet for my Valentine, Stone Sour, all similar type of music. The channel plays Halestorm, Linkin park, Killswitch Engage, Godsmack, etc. for me. They're all bands I listen to. Really cool but a little too smart maybe.