Eliot Van Buskirk has a thorough look at the new "Genius" music recommendation feature in iTunes 8:
For now, the Genius sidebar is essentially a slicker version of what we've had for years within iTunes and other programs. But we have to hand it to Apple for at least having made the recommendations more powerful and easier to access.
Once you opt in to the service, which sends your music library and usage data to Apple anonymously according to the company, iTunes can generate a list of music in your library that sounds similar to any song in it, from which you can make a playlist. The Genius sidebar (screenshots below) performs essentially the same function, except that it draws recommendations from the iTunes music store. Those recommendations include similar songs, top albums by the artist, songs by the artist missing from your collection and iTunes Essentials collections that include the song.
While Genius is no big deal, its smooth, easily accessible nature will likely cause at least a minor uptick in music sales through the service.
ITunes' Genius Feature Is Hardly Rocket Science [Listening Post]