Pandora allows users to create personalized radio stations by entering a favorite band or song, generating playlists based on similar music. Initially, some users experienced errors, but functionality improved, leading to positive feedback about the service. Users noted a limitation of 10 hours of listening, suggesting that using a proxy could extend this limit, similar to Yahoo LaunchCast. Concerns about the legality of online radio stations were raised, but it was clarified that as long as royalties are paid, platforms like Pandora operate legally. Additionally, clearing the Flash cache was mentioned as a method to bypass listening restrictions, enhancing the user experience.