Napster might take PayPal Woo. This is what their site says about it:
Do I need a credit card to use Napster? Billing information from a credit card or PayPal account is required to take a free trial of Napster or Napster To Go. However, a credit card or PayPal account is not required to use Napster. You can buy a prepaid music download or Napster subscription card at select retail locations. To find out where to get your prepaid Napster Card, click here.
I thought I saw on the latest Itunes version an option to convert to MP3 once you download.
If not, just burn all your itunes songs to a rewritable CD then rip them back into your computer as MP3. It's a little hassle, but it will make them work anywhere without restriction.
1. Send your Paypal money to a friend with a personal PayPal account.
2. The friend could then go to Amazon and buy you a gift certificate for the same amount.
3. Use your gift certificate to buy Amazon DRM-free music.
It seems like it would work.
I'd be happy to do that for you but I don't have a personal PayPal account. Mine is a business account which will take a chunk of the money, and I'd have to track it in my business accounting.
I just double checked, and I have a Premier account. So as long as you're sending me money from your PayPal balance or an instant transfer, there's no fees. I'd do it for you Woo.