A more complex question are these sites social navigation systems or do they have that potential? Are these better than the simple "recommend a book" or "what others have bought" systems like at Amazon.com
I'd say they have that potential. Thinking about my own experience with last.fm, it offers me recommendations based on algorithmic analysis not unlike "what others have bought" (in this case "what others have listened to"), but I often prefer the recommendations that were sent person-to-person because an individual looked at my taste and thought I'd like a particular song or artist.
If a music group can become a hit on myspace does this mean social navigation was how they did it?
No. But it probably didn't hurt. I find it interesting how music groups who become hits on MySpace often seek to distant themselves from MySpace ("it was the touring that did it!") as if to make more 'credible' stakes to their fame. Nancy