iTunes Genius - A feature of iTunes that provides three main features: creating playlists from your existing iTunes library, creating genre-specific mixes, and suggesting new music at the iTunes Store based on the music you like in your iTunes library.
Genius works the user sharing their iTunes library information--including what songs they have, playcounts, and star ratings. This information is then compiled into a database of all iTunes Genius users by Apple to discover relationships between songs, artists, and musical tastes. With this huge set of data, Genius is able to automatically group and recommend music based on user preferences.
The first feature, creating playlists, is designed to automatically create playlists of songs you already own that will sound great together. The user selects a song to begin the playlist, then the Genius feature builds a playlist of complementary songs from the user's music library. This is a different, more involved process than creating Smart Playlists, since this isn't just based on sorting criteria, but rather claims to actually account for what songs will sound good in what order.
Genius Mixes are similar to Playlists, but instead are groupings of songs based on genre or theme, rather than a beginning song provided by the user. Again, this feature users the Genius database to create mixes that will sound good together.
Using Genius to Discover New Music
The much more advanced feature of Genius is similar to the functionality offered by services like Pandora, which use your preferences about certain bands and kinds of music to suggest new bands that you may enjoy. The feature integrates with the iTunes Store to allow you to quickly purchase the new music.
ITunes Genius functionality was added to iTunes with version 8.0, release on Sept. 9, 2008.