Pandora Radio (iTunes link) is the most popular and most talked-about new iPhone/iPod Touch app to debut via the new iTunes App Store, and best of all, its free.

As someone who has worked both in commercial web and mobile application development, I find the explosion of popularity of this app from web to mobile to be fascinating.

Pandora is a free website where you create an account and create your own personalized ‘radio stations’ based on artists you like.

For example, if you wanted to create an 80’s pop channel, you can tell Pandora to create a new personalized channel called ‘The 80’s’, and use Duran Duran as a reference group for that channel.

Using a sophisticated algorithm, Pandora will then let you stream that station through your browser, selecting other music Pandora thinks is similar to the music you’ve chosen. At any time you can thumbs up or thumbs down a song while its playing, and Pandora will use that information to further customize that station.

Last week while I was on vacation, my friends and I spent hours playing cards while playing music on my Bose SoundDock. Although we all had our own iPods, we soon started using Pandora on my iPod Touch almost exclusively. Every now and then we would thumbs up or thumbs down a song right on the Touch screen, and we even made up a game where the first person to name the artist when they came up would get points.

As one of my friends mentioned when another iPod was playing in the dock, “Lets just use that Pandora thing - its so much easier!’.

Its true - with your MP3 collection, you either have to edit playlists, manually choose songs or roll the dice with shuffle. With Pandora, you just hit your station and go. In a sense, its a better music app than the iPod itself when you don’t feel like fiddling around.