I think one of the biggest things to note here, besides the lack of DRM, is that Amazon isn't going cheapo or terribly greedy on this deal. Not only is the song price not fixed at a minimum of $.99 (or $9.99 for an album) like iTunes, but that $.99 (or $.89 as the case seems to be with quite a sizeable portion of the library, or much much less, down to $7-8 or God knows how little for an album) will net you the sort of higher-quality files you'd have to pay an extra $.30 for on iTunes. It's really a steal, and since there is apparently much more freedom for the artists and labels to set their own prices, they could feasibly go even cheaper. Or, conversely, artists who know everyone downloads only that one good single from their album could simply up the price on it a few cents, possibly lower the prices of the "filler" songs on the album, and thus wind up making the sort of money for their better songs that they ought to be making in the first place with sales of single CDs rather than making nothing near as much as they should from those masterpieces because Apple refuses to allow flexible prices.
If there's a digital market out ther already that's doing as much for both creators and consumers as Amazon's system potentially could, I don't know about it.