Here's a description of the new Apple services via Wired:
"The new service, which launches this fall, is a station-based radio player. Pick an artist like Led Zeppelin, start a new “station” for that artist, and iTunes radio will begin playing a songs by that band, with other songs from similar bands (The Rolling Stones, The Kinks) mixed in. It resembles Pandora Radio more so than on-demand services like Rdio and Spotify, where you can pick the exact songs or albums you want to hear... You can create new stations, and rate the songs you like or dislike as they stream..."
iTunes Radio will only be available in the U.S. when it launches this Fall.