Justin Oullette explains the whole debacle with the RIAA and the record labels:

There was a popular misconception that Muxtape only survived because it was “flying under the radar,” and the moment the major labels found out about it it’d be shut down. In actuality, the labels and the RIAA read web sites like everyone else, and I heard from them both within a week or so. An RIAA notice arrived in triplicate, via email, registered mail, and FedEx overnight (with print and CD versions). They demanded that I take down six specific muxtapes they felt were infringing, so I did.

The “new” Muxtape sounds equally amazing as the “old” one was:

Musicians in 2008 without access to a full time web developer have few options when it comes to establishing themselves online, but their needs often revolve around a common set of problems. The new Muxtape will allow bands to upload their own music and offer an embeddable player that works anywhere on the web, in addition to the original muxtape format. Bands will be able to assemble an attractive profile with simple modules that enable optional functionality such as a calendar, photos, comments, downloads and sales, or anything else they need. The system has been built from the ground up to be extended infinitely and is wrapped in a template system that will be open to CSS designers. There will be more details soon. The beta is still private at the moment, but that will change in the coming weeks.