Enter Jobs. Back in April, Apple's CEO revealed that he had spent the previous year negotiating an unprecedented deal with all five major labels and thousands of independents. His iTunes software, which had previously been nothing more than a place to store and play digital music on a Mac, would become a gateway to the Music Store, where you could easily find and save music to your hard drive, CD or iPod music player—no subscription necessary, just 99¢ per song, or $9.99 for an album. Competitors tried to match that price but couldn't come up with a service as free of restrictions. They said Jobs had been given a sweet deal by the labels because Apple, with its miniscule share of the computer market, was never going to be a real distribution threat. "The Mac world is a walled garden," said BuyMusic.com vice president Liz Brooks. "The PC environment is like the Wild West."

Then came iTunes for Windows, and suddenly there was a new sheriff in town. Not content with creating a music store for PC users that was a perfect clone of its Mac counterpart, including all of the 400,000 songs Apple now has the rights to resell, Jobs added a couple of cool new features, the best of which was a monthly allowance you can set up for your kids to govern their online purchases—a godsend for any parent trying to curb an offspring's downloading habit.

Jobs has one more reason not to be concerned about the competition. "The dirty little secret of all this is there's no way to make money on these stores," he says. For every 99¢ Apple gets from your credit card, 65¢ goes straight to the music label. Another quarter or so gets eaten up by distribution costs. At most, Jobs is left with a dime per track, so even $500 million in annual sales would add up to a paltry $50 million profit. Why even bother? "Because we're selling iPods," Jobs says, grinning.

That may make iTunes the most benign-looking Trojan Horse in software history. The Windows crowd can get iTunes free, and it offers almost all the same functionality as the paid versions of MusicMatch and Real One, two PC-based rivals. But iTunes is the only music application that will work with the enormously popular iPod, and it has features—like its powerful search function—that are unrivaled. "Once people are locked into using iTunes, the game's over," says Charles Wolf, an analyst at the New York City-based Needham & Co. investment bank. "They could sell an extra 2 million iPods because of this." And the margins on these devices make the Music Store's arithmetic look like child's play. Each $499 iPod returns as much as $175 in profit, Wolf says.

Such calculation may also explain why iTunes doesn't support Windows Media Audio files—a Microsoft format that Bill Gates had hoped would become the music-industry standard. If iTunes becomes the player of choice for PC users, it would be a blow for Microsoft's grander audio ambitions—and may well unearth the hatchet that Jobs and Gates buried back in 1997.

Aubrey said Wesleyan students are enjoying a new parlor game -- going through music libraries trying to guess what their owners are like. At any one time, 30 or 40 iTunes libraries are available on the campus network, which is shared by about 2,000 students.

"This one playlist had a lot of German techno," Aubrey said. "We predicted this was a kid wearing a mesh shirt who wanted to be a Nazi." At a party shortly afterward, Aubrey recognized the playlist and asked whose music it was. "They pointed to this kid in a mesh shirt with a swastika on his arm," Aubrey said.

When Aubrey showed his own music library to a friend, she said it belonged to a "wimpy, skinny kid who liked to sit in his room a lot, which is myself."

"We were right on several counts," he said.

Students are starting to realize they must manage their music collections, or at least prune them, to maintain their image, Aubrey said. He confessed to deleting a lot of stuff himself.

"I had a lot of show tunes I had to get rid of," he said. "And a lot of punk pop from my earlier days like Green Day and Blink-182."