The reason I think Google Music is taking so long to come out is this. We already know they want to be able to stream your music from the cloud (as shown as I/O 2010) but if everyone is storing their music in the cloud it takes up a hell of a lot of storage, not to mention could take an age to upload. So I think what they are trying to set up is something that will scan your music collection on your computer and note what music you have WITHOUT uploading anything other than the database. When you want to play a song the system checks it is in your collection database and streams from a copy they already have uploaded. Only if you have something they don't (that album by your brothers band for instance) will it get uploaded.
The problem with this is that the record labels cant know for sure you have bought the music or just downloaded it from a torrent site, so are wary of this. Hopefully Google can convince them of the folly of their ways.