Bummer. The music industry is a tough nut to crack. I don't know anyone who's really ever made tons of money on a startup there; tons of legal bullshit. Anyone know if Napster ever did well? I think Shawn Fanning only ever made money on Snocap.
The music market is simply huge, and there have been many successes. There are plenty for music marketplaces, for instance, and while the largest ones are part of big companies who have more leverage to negotiate with the record industry, there are lots of smaller ones out there that seem to be doing fine, like amie street.
The original Napster wasn't successful as a business, but it completely changed the way people thought about music distribution on the internet. Some of the core napster employees went on to create imeem, which seems to be doing great.
There have been a few great exits - last.fm, broadcast.com, and winamp come to mind, and I'm sure there are plenty of less publicized ones.