Only because I have discussed this in depth a few times,
I am not an attorney and I am not giving legal advice. I am a legal secretary and I have discussed this subject at work before. The conclusion that we came to was, many people have been whispering about that clause. You can talk to your attorney, but the ones I know read it the same way I immediately did. It's just a clause to protect themselves, not to hijack music.
It only applies to the SERVICE of MySpace.com and it is completely null and void the second you take said song offline. Even to "sublicensees." They're basically ensuring that you can't sue them for any problems that occur with broadcasting your music on the World Wide Web. Which is a liability unto itself with possible tampering, copying, et cetera. No one is stealing anything. To my understanding, when songs were posted at MP3.com (or a variety of other similar services) ages ago it was subject to very similar, usually ignored legalese. Not to mention, I doubt the major record labels (unaffiliated with Fox) that produce pages for their artists would post whole songs if they were truly concerned about ownership thereafter.
Either way, it's a great P.R. machine but you really have to have something on the service or it lacks it's listening appeal. Some people choose to truncate their songs, but usually whole songs to my understanding (obviously) get more plays and visits.
I also understand the need to secure your material, just saying that I wouldn't loose any sleep over it.
- Marissa Meizel