Audiogalaxy has come up with a use for its peer-to-peer (P2P) networking experience while staying in the record companies' good books. Yesterday, the company launched a personalized radio service similar to Pandora or Last.fm radio, which uses P2P to share your library with other users. Named Mixes, the service allows you to put together the "ingredients" which determine what music will make up your radio stream, including similar artists, genres, or even user locations. The P2P network gives the service access to a vast number of tracks and mashups that would be unavailable with a centralized catalog. As Audiogalaxy CEO Michael Merhej told GigaOm, "We have The Beatles. Spotify doesn't have The Beatles."

It's not the only legitimate music service to use P2P to help distribute its bandwidth — Spotify uses P2P to relieve pressure on its servers — but it's the first time we've heard of a label-sanctioned service streaming music from users' computers. Mixes is currently only available in the US, and is ad-free. Although it's free for now, Merhej told GigaOm that he hopes to eventually charge users $4 per month for mobile access — competitive compared to the $10 charged by some other services.