Rhapsody for iPhone [free with subscription - iTunes link] has finally released an update to allow offline access to their music:

With a Rhapsody subscription, you can tap into over 9 million full-length songs, and download as much music as you want to your device. Create playlists for your commute, your workout or your flight – and download them instantly.

You can download and try Rhapsody for iPhone free for a week, and if you like what you hear, you can pony up $9.99 a month for a full subscription (which is locked to one iPhone).

It’s US only, but we don’t feel too bad for Europeans as Spotify [Free with subscription - iTunes link] revealed they were integrating Facebook Connect for the usual slew of new social interactivity, including sharing playlists, favorites, and likely the ability to mass shun songs and users who displease the collective (joking! A little!).

If you’re a Rhapsody or Spotify user and you check out the updated functionality, let us know how it sounds to you!

[Engadget, 9to5Mac]

Rhapsody [free - iTunes Link] is now available in the iTunes App Store. It was less than a month ago that we told you about the submission of RealNetwork’s Rhapsody iPhone app, well Apple may have been scared straight by the FCC because it’s been approved and is now available as a free download.

Now don’t don’t forget there is a $15/month subscription fee you must dish out if you want all of that music streaming goodness over AT&T’s data network or Wi-Fi. Sorry folks, no off-line access like Spotify here.

In a strange twist of fate, PreCentral.net tells us Palm has rejected their first App Catalog app, NaNPlayer, a (superior according to PC) replacement for the built-in Pre music player. Why did they do this? The developer used an undocumented API and that violates the SDK agreement. Sound familiar, iPhone users? Will Palm now get the same grief Apple does?

Sound off in the comments!

RealNetworks recently submitted their on-demand music streaming application for the iPhone and iPod Touch to Apple for review. Yes, this is the moment all of you Rhapsody subscribers have been waiting for.

Rhapsody is a subscription based service, $12.99/Month, that allows you the ability to listen to any single song or album on-demand. Current subscribers to Rhapsody can simply log into the app with their existing user name and password and can be streaming music in no time. If you are not a subscriber you will have the opportunity to take the app for a free limited time test drive.

The big question is whether or not Apple will approve this app but given the amount of negative press Apple’s app approval process is currently getting, we are leaning towards this one being approved.

Subscription based music streaming is in high demand on devices such as iPhone so it makes us wonder – when will Apple make it’s move into the music streaming business? Not that this would be likely to actually happen but Apple could even offer the service as an extra perk to all of us who subscribe to their MobileMe service.

Would you be willing to pay Apple for a service such as Rhapsody or are you perfectly content with current iTunes setup?

[Real Networks Blog via Daring Fireball]