The iTunes Wi-fi Store In Starbucks feature is now live in some Seattle Starbuckses, and presumably New York as well. It works as advertised. I notice it takes a moment for the phone to smell the special Starbucks-brand wireless access, and you have to reject the other wi-fi access points in the area first (including "tmobile," which may or may not be Starbucks' own for-pay T-Mobile hotspot). But then the iTunes Wi-fi Store has the Starbucks icon, and you can browse the last dozen songs played over the coffee shop's sound system, or other Starbucks-promoted albums, and purchase individual tracks or full albums and download them while you drink.
I notice that downloads and previews of Starbucks-featured music are surprisingly fast. I'm wondering if the data is coming straight off a server in the back room in those cases. I neglected to try other non-Starbucks parts of the iTunes Store, but that ought to work according to Apple's official description of the service.
I had to run and catch a bus in the middle of a download, and the phone did the right thing and paused the download. When I walked past another Starbucks, I had the opportunity to finish the download, though I had to re-enter my iTunes password to do it—which allays a privacy concern, since they could effectively know my whereabouts every time I walk past a Starbucks. When I got home, the songs copied back to my computer's iTunes library, and iTunes immediately did a follow-up download of the digital liner notes for the album.
The Starbucks home page says they're giving away a song a day via the iTWFS to promote the feature. I guess I was in too much of a hurry to notice.
Of course, Starbucks plays from their Hear Music label, which apparently specializes in super-safe established mega-artists, with tame new releases and re-releases from the back catalog: Ella Fitzgerald, Joni Mitchell, Ella Fitzgerald, Bob Dylan, Ella Fitzgerald, and so forth. I guess there's some stuff there I might be interested in, but for the past few months I haven't been in a Starbucks that wasn't playing Ella Fitzgerald the entire time I was there. Fine to drink hot chocolate to, but not necessarily stuff I need to buy.