Last.fm, one of the truly great online music sites, has an iPhone app, but I find it somewhat lacking. It seems to have most of the features it needs, but for whatever reason the app just doesn’t flow well. Loading time seems to be a constant issue and site navigation is clumsy.

That looks to change with new version of the application, as you can see in the video below leaked out by Digg founder Kevin Rose onto Twitter. (He claims it’s version 2.0 but it’s clearly labeled in the video version 1.1 — the current version is 1.0.2.) It’s not clear when this version will be out, but when it is, it’ll likely compete with Pandora and AOL Radio for my online music time with the iPhone.

LastFM2 from MG Siegler on Vimeo.