An interesting report on what might have been ...
My suspicion is the HP guys tried the Napster 2.0 service and compared it with iTMS. It doesn't take much to decide Napster 2.0 isn't well executed (or thought out for that matter).
The market penetration and sales figure claims are somewhat similar to mine and probably are from better data (I have been looking at site traffic and normalizing it with a few announced results) ... I would peg Napster hits at about 1/5 the iTMS rate, but they were probably 1/4 the size in the November timeframe ... things are getting worse for them.
They maintain the one thing Napster 2.0 has, its brand, will ultimately rescue them. My chats with people in primary music purchase stages (14 to 25) indicate the brand ranges from negative to, at best, neutral. Once powerful brand names can fade very quickly - particularly if they abandon what originally made them popular.
Oh - and there is this little matter about the lack of a cool player.