Beginning today, October 16 2012, Xbox 360 users will get the new fall dashboard, which includes Xbox Music! This is the first in the launch of several avenues to run Xbox Music. I have included the video below because it gives some good details on the service:

Xbox Music

Xbox music is a new service from Microsoft that will change the way that you listen to music. It works across multiple devices. Here are the launch dates that I know so far:

  • October 16th – Xbox 360
  • October 26th – Windows 8 (including Windows RT)
  • October 29th – Windows Phone 8
  • Support on other devices (iOS, Android) is expected “within the first year”.
Features  
Free music streaming

Every Windows 8 and Windows RT tablet and PC lets you stream music from one of the largest digital music catalogs on the planet….free. Listen for over 80 years and never hear the same song twice. Seriously. Try it.

Music Discovery

Music should never be work. That’s why we’ve made it easy to discover new music with great features like Smart DJ, which creates custom stations based on your favorite artists.

Offline listening

Xbox Music Pass allows you to download songs to your device so that you can listen to all your favorite music whether you’re sitting in your living room or stuck on a plane.

Cloud Connected Xbox Music is cloud connected, automatically syncing your Xbox Music Pass collection and playlists across your tablet, PC, phone, and Xbox 360.
Create and Save Playlists

Easily create and save playlists so you have easy access to your favorite songs. With Xbox Music Pass, your playlists follow you and stay in sync across all your devices.

Music Store The Xbox Music Store gives you 24/7 access to one of the largest music catalogs on the planet with over 18 million songs. Buy full albums or just your favorite songs.

For more information I thought the Techhive team did a good job of looking at technical details of the service. You can find that here:
http://www.techhive.com/article/2011734/microsoft-launches-xbox-music-what-you-need-to-know.html