While I seem to be against all new web ideas, Sellaband is the kind of idea that I actually like. You have a band, you want to cut a CD, SellaBand let's you find people that like your music and will buy a chunk of your future profits. It isn't Web 2.0. It isn't disruptive. Music labels won't die as a result. But lots of bands will get to cut a CD that couldn't do it before. A few big names may even get their start this way. By and large though, record companies still have a huge incentive to find good talent, which is why good talent usually makes it to the top eventually.
The business model for music artists is in need of an overhauls. Radiohead took a big risk with the release of their latest album by offering it basically for free and letting customers pay however much they wanted, but I think it will pay off in the long run with more loyal fans.