Now that the Pepsi 100 million song giveaway has officially been launched, we think it's probably safe to assume that the iTunes Music Store is going to enjoy a significant increase in traffic over the next few months. There'll be more songs downloaded, more people installing and using iTunes, maybe even more iPods sold as a result. (There'll also be a lot more fizzy syrup purchased and a lot more teeth rotted away, but that's not strictly relevant. Although we can't stress enough the importance of daily flossing; have you tried Glide? Because it totally changed our lives. Seriously.)

The upshot, of course, is likely to be that the number one music download service will extend its already massive lead over what we chortlingly refer to as its "competitors" (chortle, chortle-- told you) and the iPod will retain its position at the top of the market share heap for portable players, both in units sold and cash pulled in. Oh, and don't forget about the boost Apple will get once Hewlett-Packard comes online with its bluePod and its iTunes-on-every-Wintel plan. All told, it sounds like Apple has the market nicely sewn up for at least the next eight or nine months.

But is the company resting on its laurels? Are we doomed to watch Apple get complacent and toss its lead out the window as copycat competitors churn out cheaper products and services that aren't nearly as good but are "good enough"? It'd be heartbreaking to watch Apple's digital music lead go the way of its GUI and ease-of-use lead in desktop operating systems, but with the iTMS's use of the AAC file format and proprietary Digital Rights Management code restricting native iTMS song use to iTunes and iPods only (while every other device and service climbs into Microsoft's overcrowded bed and licenses WMA), several analysts and pundits think that's exactly what's going to happen.

Personally, we get the feeling that Apple is boosting its digital music market share so strongly right now, it's actually got a decent shot of beating Microsoft at the format game. If the iPod keeps selling until it becomes ubiquitous, other music download services will either have to switch to an iPod-friendly music format or close up shop. If that happens, makers of portable players would follow suit. It's a war that Apple might conceivably win-- even though it's battling Microsoft. Crazy stuff.

Still, though, we're a little relieved to hear even questionable reports that Apple and Microsoft may be working together to resolve the WMA vs. AAC conflict before anyone gets hurt. Billboard claims that, at the behest of the music industry at large, "hardware makers and digital format developers" (including "bitter technology rivals-- most notably Microsoft and Apple") are "engaged in private talks" in hopes of improving compatibility between competing devices and services by next year. So far the talks are apparently centering on a means to convert between the protected AAC and WMA formats, which is clunky, but not nearly as clunky as burning an audio CD and re-ripping the song.

The implication is that eventually a more transparent solution might be found-- but Billboard acknowledges that, as the market share leader, Apple holds all the cards right now, and has just about zero incentive to make iTMS songs compatible with non-iPod devices. Apple makes money on iPod sales and just about loses cash on each song sale, so selling songs for other manufacturer's players would be silly. So hey, maybe the war will continue after all. Wouldn't it be nifty if Apple won this time around?