I'm still regularly viewing this thread since it was written in 2005 and helped me to build the record label I have nowadays. Some people say though that you should only create a record label if you have songs you can sell. Personally I believe that's wrong. You can create a label before you actually sell songs to distribute free songs because the concept of a record label enables you do carry it out in a professional way. However you should distribute songs for free for more than 3-5 years because if you don't release any official songs afterwards, they will not take you serious and believe you're just one of these millions of other people that are trying to make it. If you create a label to distribute free songs it should be part of a major music plan that includes the sale of songs at a later stage.