I'm working on an iPhone interface to the Magnatune catalog.
This feature will be made available in September. I have not yet decided whether it will only be available to paid subscribers of the "stream" (or other) service, or whether to also make it available on a free form, with advertising (like the current flash audio playing)
This is what the iPhone interface to Magnatune looks like:
and when an mp3 is playing.
Besides the iPhone browser, you will also be able surf the Magnatune web site with your iPhone and click on the "one big mp3" link from the album details page to listen to it:
the "trick" that makes this work, is to have Magnatune build a single hour-long mp3 file that is the entire album. The iPhone doesn't support "playlists", only direct playing of media files, so this was my work-around. It means you can't jump to song #4 directly, though once the mp3 album is downloaded, you can jump around at various time-points.