Each of these things has changed the way we think about music. For instance, the ease of picking and choosing specific songs to download has had a dual effect on album production, with some bands attempting to produce complete albums that will be desirable in order to promote the sale of older media like CDs, and others focusing on incredible singles that will rocket them to popularity regardless of what the rest of the album sounds like.
The portability of massive amounts of songs encourages listeners to carry around music for any context. Because it is possible to carry around many artists and many albums at once, a diverse music taste is a must in the modern era. Playlists enable easy mixing and matching, and having a handful of good mixes on hand is easy to do. The typical iPod carries music (and often playlists) appropriate for many situations: quiet study time in the library, working out, falling asleep, rocking out in your car by yourself, spontaneous DJ-ing for a party of you and friends.
Easy sharing causes rapid spread of music from one person to another, and it encourages personalization. Download rates give you a feel for the popularity of a song on P2P websites, and recommended downloads notify listeners of possible artists and songs they haven't explored that they might like. Websites like Last.fm, Pandora, and Musicovery further enhance this discovery process. Musicovery links music by feeling and emotion, while still providing artist sorting features. Last.fm links music by tags, and provides a large searchable database as well as "radio" stations that group similar artists.
In other words, the music scene is different now than it was when Reel Big Fish complained that "you're gonna go to the record store/you're gonna give'em all your money/radio plays what they want you to hear/they tell me it's cool but I just don't believe it..." It's different enough to begin to break the old methods of distributing music - instead of going to the record store and giving them all your money, or listening to the radio play what other people want to listen to, you can go download In Between Rainbows for a nominal donation online.