Update, 2/12/2008: We can no longer recommend the Sansa Connect due to Yahoo's decision to discontinue its Yahoo Music Service. Yahoo will transfer its subscribers to Real Networks' Rhapsody service, but SanDisk has informed us that the Connect's Wi-Fi will not function with Rhapsody. You'll find more details here.

Microsoft’s idea of letting people share their favorite songs using a wireless connection was as botched in execution as it was brilliant in conception. SanDisk’s Sansa Connect makes much more sense, although it requires users who want to share to cough up the $12- to $15-per-month subscription fee for Yahoo’s Music Unlimited to Go service.

Unlike the Zune’s silly wireless-sharing capability, the Sansa Connect’s networking feature is useful, even if you’re not interested in sharing or renting music. The device can join any Wi-Fi network (with support for WEP, WPA, or WPA2 security, but not Enterprise authentication) and it uses two free Yahoo services: Launchcast Internet radio and the Flickr photo-sharing service.

The Internet radio service is particularly cool because it uses the Zing Mobile Entertainment Engine to automatically create playlists based on the songs you’ve listened to. This works much like the Internet services Pandora and Last.fm do on the PC, and it’s a terrific way to discover new artists.

Although the Sansa Connect sounds very good, we do wish SanDisk hadn’t limited the player to just MP3, WMA, and secure WMA audio formats at maximum bitrates of 320Kb/s VBR. We find ourselves increasingly enamored with the pristine quality of losslessly encoded music (FLAC, WMA lossless, etc.), which it doesn’t support at all. We do understand the file-size drawbacks: The Tower of Power tune “What Is Hip?” requires about 8MB of storage when encoded (using EAC and LAME) in MP3 format at 320Kb/s VBR, compared to nearly 36MB when encoded using EAC and FLAC.