I've just discovered this really neat app on the iTunes app store.
Basically it allows you to stream your itunes library to the iPhone/iPod touch over LAN and also over the net (untested).
I've tested this over lan and it seems to work very well, apart from the fact that it won't recognise my purchased music (stupid DRM).
Anyway, here's the link:
Apparently this will only be free for the first 100,000 downloads, so you'd better be quick!