This is the type of service I would use (In order of importance):
1: Download lossless albums (either by track, or full album with a CUE sheet so I could split it myself.) I don't care what format, since it's lossless I can convert it to my desired format.
Price? Less than what I pay for CD's normally. Say less than 1$ per track.
2: Stream unlimited albums for cheap monthly fee (Mostly as a tool to see what albums I would buy from #1.) Decent bitrate here, but wouldn't need to be insanely high since I would just be using it as a "preview tool".
3: No DRM. I don't swap, but I want to be able to do what I want with the music that I purchase. Portable, burning mixed CD's, MC playing, etc.
4: Deep selection. I don't care that you have Britney Spears' latest album. I do care that you have selections from lesser known but quality artists.
I'd be the first to sign up if I saw a service like this