I've been known to waste a stupid amount of time cleaning up and relabeling my iTunes library, but I've never been one for the creation of playlists - I get distracted too easily by listening to the songs I'm considering that I never actually accomplish anything. Genius was made just for me, clearly. You pick a song from your library, hit the little atom icon, and presto - a 25 song playlist culled from your library to compliment the seed song! My first three tries produced very reasonable and listenable lists. A Cathie Ryan song produced a very mellow list, with Loreena McKennitt, Dougie MacLean and the Chieftains featured prominently (Enya and Ray Lynch I can see too, but I question the inclusion of Rosa Passos...) but iTunes doesn't know Battlefield Band at all, which I would have liked to have associated with the general Celtic-ness. It made me a nice Christmas list when I planted The King's Singers version of "Veni, Veni Emmanuel", focusing mostly on similar choral and sacred music, but with a bit of Dean Martin for fun. It even made me smile by including "Tessie" and "Dirty Water" in a playlist based on the Dropkick Murphys "Shipping Up to Boston".
I suspect that the utility of this feature is directly proportional to the size of your library. With my 60G library, it has lots of options, with a smaller library it might return stranger matches, forced to stretch a bit.
The system has some faults - it doesn't like the Beatles, for one. (Honestly, who doesn't like the Beatles?) The Beatles are notoriously NOT available for download on iTunes, so it seems that it's not sure how to deal with them, as they aren't built into its initial knowledge base. Clearly the goal of Genius is to sell more music on iTunes - even for Battlefield Band and Fela Kuti, on which the Genius list choked, it lists top albums for download and "Top Songs You're Missing" in the Genius Sidebar. As such, it has a skew towards things that are available on iTunes, and is less able to deal with more obscure tracks. The true test is going to be in its ability to learn these artists from association. This feature is not for the privacy anxious, as it learns based on your listening habits and those of all your fellow iTunes minions, uploaded and presumably cross-referenced, but I'm hoping that as the user base grows, iTunes Genius will learn Battlefield Band, Fela Kuti and maybe even the Beatles.