Hey boss, I worked on a similar site a while back called Audiolizer (
http://www.audiolizer.com). Pretty much the same thing, we used the Youtube API for songs. Its a pretty crowded space, so don't expect to make big money or traffic out of it.
But yeah, keep the interface clean and simple (and not bright pink please!). IMO, I would put the search results in the center column and the playlist off to the right. Its a bit unintuitive the way it is now because when a user searches for something, they expect it to pop up immediately in front of them.
You should definitely build out playlists (if you haven't already) and what you can do is create a few and link to them on your homepage (ie. Coldplay's greatest hits). Integrate Facebook/Twitter logins for higher registration rates. Have fun.