They are basically an online music locker. You upload your MP3s, and you'll be able to stream your music via their flash-based web-player on any internet connected PC. They also provide a widget, like the one I put on the side. You cannot "save" your MP3s back, obviously to prevent "piracy," or more likely to save the creators from lawsuits.
Anybody can play your music tracks fully via the widget through playlists. People can browse your library on the mediamaster's website, but tracks are limited to the first 30 second clip. Aside from the widget, the site also provide a .pls/.asx link so you can treat your playlist like an internet radio channel. As for uploading, you can upload by tracks, or drag-n-drop folders on the java based advance uploader. Note that there is an iTunes button in the advance uploader. Pressing this button will upload your whole iTunes library, so be careful.
Neat idea, although I wonder how long this will last. I can see Mediamaster being compared to services like live365. They can be considered as internet radio, and then come the licensing issues. We'll see how long this will last/be free.