It all boils down to if you like to keep listening to the same tracks forever, or do you treat most music as disposable and listen to lots of new stuff every month?
If you end up listening to lots of new music every month, and you tend not to re-listen to old music, then Napster is fine. Treat it as a customizable radio channel where you set the tracks you want to listen to.
Napster lets you discover new music that you might like really easily, because it's got a pretty good recommendations engine, as well as the ability to just query what anyone else is listening to right now, or what's popular with other Napster members.
Because it doesn't cost money just to try some tracks out, I've spent hours just wandering the recommendations engine looking for interesting things to sample. That's definitely not something I'd do if each track cost 99c to download or if I could only hear 30 secs of each track before deciding whether or not I'd pay for the full thing.
For me personally, I think Napster is a much better choice than say, XM or Sirius, since I don't care about talk shows, radio news or sports, or any of XM's exclusive content. Napster works anywhere I have a PC (at work indoors), and anywhere I can take my MP3 player (in a plane, underground, wherever).
For me personaly, I think Napster is a much better choice than iTunes, since I don't care about keeping 90% of my music (it's just background noise to listen to), and I like constantly having a feed of new stuff without having to pay for each track individually, especially since 90% of it I'll get sick of and toss in a week or two.
For the 10% of music that's actually good enough to keep, I'd much rather pay a couple bucks more than iTunes and buy the physical CD -- I'd get the art and liner notes, higher audio quality than AAC, and an unprotected professionally stamped CD that I can rerip myself or whatever.
iTunes makes sense for some people, and Napster makes sense for others. Some people will never go legit, and just pirate.
Everyone's decision will be different -- but IMHO choice is a GOOD THING, not a bad thing.