This image was lost some time after publication.

Digg founder Kevin Rose claims this iTunes 8 feature from a reliable source:

iTunes 8 includes Genius, which makes playlists from songs in your library that go great together. Genius also includes Genius sidebar, which recommends music from the iTunes Store that you don't already have.

It sounds like an iTunes version of Pandora, geared to selling you more music you might not have discovered on your own.