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Like Spotify? More like Last.FM with a cheap AIR client. In fact the main reason I love about Spotify is the state-of-the-art desktop client.
I've never used Spotify, but I'd equate rdio to lala with a subscription pricing scheme instead of last.fm. I agree with you on the desktop client though. It is sub-par.
Doesn't Spotify have a lot of free options? This is just another subscription music service. What makes Rdio better than last.fm subscriptions, Pandora One, Zune Pass, Napster, and Rhapsody?
Yeah, this really doesn't seem at all like Spotify. The beauty of Spotify is the amazing, AMAZING quality of their free offering. Using it enough makes you kind of itch for the paid one a little, because it has some nice additional features, and eventually you try to upgrade.

Then the fact that you don't actually live in the UK gets exposed by your credit card and you go back to the free/proxied version :) Regardless, another Yahoo Music/Rhapsody/whatever really doesn't seem like a big deal.

How is Spotify at making coherent playlists? I'm tempted to try it, but I'm beyond satisfied with how well Pandora queues up songs in a sensible order without jarring transitions, and I'm wondering if Spotify is comparable in that respect.
Imo, it is. Spotify has a very well-crafted queuing system.