There seem to be 2 different business models that these sites follow.
The first is fairly straightforward - you pay for each track or album, download it, and get specific use rights (burn X # of playlists, copy to X # of computers, etc.).
The second model is subscription based. You pay a monthly fee and get access to a large number of tracks that you can stream (i.e. listen to, but not download) and possibly a certain number of downloads. You may also get access to internet radio stations or other services. If you stop paying your subscription fee, most, if not all, of your music goes away. All of the subsctiption services have different features, so you have to compare very carefully.
The story gets more complicated with some companies because they offer both models from the same site. I think this is the case with Napster. Some companies also require you to use their software while others are web-based.
I would love to be more specific, but I still buy all my music on CD. My only direct experience with the legal download sites is a couple of tracks I bought off iTunes just to test it out.
Hope this helps,
Zack
Pass it on - Take a kid to a show.