Free Music-related Software:

Pandora: A product of the Music Genome Project, on this nifty site you enter an artist, song, or style you like and an algorhythm (note the spelling joke) adds similar songs to your playlist (highly recommended).
Musicovery: An interesting visual take on the Music Genome Project. In addition to entering an artist you like, you can also use sliders to create a mood and the program will identify music to fit what you're feeling.
YouTube's Music Discovery: Similar to Pandora but you can watch as you listen.
The Hype Machine: Surveys the entire Web and selects the most buzz-worthy music of the moment, drawing from the most-discussed artists, albums, and tunes. I'm guessing Beethoven, Debussy, Bach, Tuvan Throat Singers, and Djembe ensembles won't be found here.
Grooveshark: An iTunes-style interface. Enter an artist and all their available songs come up. I entered more obscure artists like Chris Smither, Fela Kuti and Mamady Keita and got their music, so it looks to be a relatively deep musical well at Grooveshark.
FlyFi: Same story as before. You enter the artist you like and the site will suggest similar music.
Last.fm: Allows you to both listen to new music and share what you're listening to. Haven't tried it yet but it sounds like a great idea. Music needs to be shared.

Indaba:A place for musicians to find one another, create and remix music, and showcase their work. Record with their online session console. Haven't used it yet but it appears that you can't play with others in real time.
Bojam: An open-source ethic drives this very cool tool. This site allows musicians to collaborate no matter where in the world they make music. If you’re stuck in rural Alaska (like I was) and want (need!) to play with others, this is the perfect tool. Also great for the recluse who still wants to be social. There’s a vid demonstrating how this works on their home page. Again, doesn't look as though you can play in real time. For that you need...
eJamming Audio: Another online collaboration tool that lets you play with others in real time.

Aviary: This company offers a bunch of free tools but the one that interests us here is their new Music Creator (more info here). It’s a track-based and program in which you can create loops (or use pre-recorded loops), record stuff of your own and manipulate it in all kinds of ways. A fantastic and powerful tool/toy.

Audacity: Far and away (in my opinion) the best free audio editing software out there. Even better than many commercially available products. Extensive and easy-to-use tutorial and tip Wikis as well as tutorial vids on YouTube. Simple and easy-to-use benefit of the open source ethic.
Aviary: This company offers a bunch of free tools but the one that interests us here is Myna, their audio editor. It's all in the cloud so you don't clog up your hard drive with files.

Noteflight: Free music-notation software. Highly recommended.
Finale: Notation software, mostly for purchase, but ther are a couple cheaper options:
- Reader: Read any Finale sheet music or music XML file and print it.
- Low cost option: Finale Notepad ($9.95 download). Demo here.
Sibelius: Similar to Finale, but no free/low cost option. However, there is:
- Non-saving trial of Sibelius, to get an idea of how the program works.
- Scorch: Allows you to view, play, and print any Sibelius score posted online.

The entire Real Book (jazz standards) converted to Band-in-a-Box backing tracks. If you have this handy piece of software (see below), you can get a free copy of several hundred jazz tunes in the correct style and instrumentation.You'll have your own rhythm section to play with. A bit of chord knowledge is helpful but if you can copy the chords from a song, you're all set. I have one and love to play with it. Fantastic resource!
NOT FREE )-: Band-in-a-Box is a great help for learning melodies, chords, and improvising whether its rock/pop, jazz, country, or bluegrass you're interested in playing. With the expansion packs your backup band will sound like real professionals. There are great lessons available, too. Comes in a variety of levels: MegaPAK includes most extras ($219. this is what I have and love it!), Pro version (Win: $106; Mac: $99), or the Everything Version with all expansion packs, tutorials and more ($499 Windows / Mac)