Of course, with hundreds of music files on your PC, your hard drive can become just as cluttered and disorganized as a rickety CD rack. Companies like MusicMatch have taken a shot at imposing some order on the chaos, but their software is so awkward and unintuitive that it could only have been designed by geeks for geeks.

Finally, someone got it right. This week, RealNetworks is unveiling RealJukebox (available for free at www.real.com), which it bills as the first complete digital music solution for average listeners who want to use their PCs to play and manage their personal collections.

Here’s how RealJukebox works. Once you’ve installed the software, just grab a regular CD from your collection and pop it into the PC’s CD-ROM tray. RealJukebox will start playing the CD and recording the music to your hard drive simultaneously–something no other current software can do. Audiofiles should be aware that the sound isn’t quite CD-quality, but it’s close enough that most listeners won’t know the difference. If you’re connected to the Internet, RealJukebox automatically goes to CDDB.com (the world’s largest music CD information database) and instantly downloads the pertinent info about the CD (name of artist, name of album, title of each song, musical genre), sparing you from having to laboriously enter all of that into your database.

With a fast PC (233 megahertz or more) and a speedy CD-ROM drive (at least 12X), the music is recorded to your hard disk three to five times faster than the speed of listening; so by the time you’ve heard one third to one half of the album, the recording process is done. Just by listening to music on your PC, you’re simultaneously adding to your digital music database with zero extra effort.

The software organizes your music for you, letting you view your entire collection by artist, album or type. You can drag and drop titles to create custom playlists, like an eclectic mix of Beethoven, Hendrix and Springsteen. You can delete the songs you don’t like and arrange the tracks in any order. And when the final version is released three months from now, you’ll be able to slap those songs onto portable devices like the Rio.

RealJukebox scores by understanding that powerful software must also be simple to use. “The question was how to hide the complexity of all the things it was doing at once,” says CEO Rob Glaser, who left Microsoft in 1993 to found RealNetworks, the company that created what is now the de facto standard for streaming audio on the Net. “Most people just want to be able to hit the play button.” By combining the ease of use of your regular CD player with the power and flexibility of the computer and user-friendly software, RealJukebox is likely to appeal to music lovers who have been intimidated by the very initials MP3 and the complexity associated with it.

The early response from the handful of people who’ve seen the product has been very positive. Jae Kim, an analyst at Paul Kagan Associates, says, “This is going to do to digital music what Windows did to DOS-based computing. It takes [digital music] out of the hands of enthusiasts and into the hands of the mass market.” Mark Hardie, an analyst at Forrester Research who predicts that digital music downloading will be a billion-dollar business within five years, goes even further. “It is a significant step toward leading consumers to digital consumption of music–buying and listening to it on digital devices.” That’s why RealJukebox has a Get Music feature that enables you to go out to the Web and obtain new songs from partners like MP3.com and a2b music. You’ll be able to download a vintage Offspring song, “Beheaded,” and “Are You Gonna Go Our Way,” the first single from Public Enemy’s new album, which Atomic Pop is releasing over the Internet.

Given the controversy over MP3, RealNetworks has had to walk a philosophical tightrope between the geeks and the suits. Since MP3 is the most popular personal recording format, the company had to support it. But the major labels didn’t want RealJukebox to record files in the legal-but-pirate-friendly MP3 format–especially since IBM and RealNetworks recently announced a partnership that makes it likely that RealJukebox will be the front-end software for their ballyhooed album-download experiment next month. RealNetworks’ solution? Support MP3, but make its own G2 audio, with built-in security and watermarking, the default format (though the security features can be turned off). “We can’t prevent people from doing illegal stuff,” says Glaser, “but we’ve put in guardrails.” That has placated the labels somewhat. But if RealJukebox becomes as popular as RealNetworks hopes, and people who’ve never digitized CDs start doing so, it also gives them a decent shot at supplanting MP3. Glaser denies that he has an embrace-and-extend strategy (“That phrase has become synonymous with Microsoft,” he jokes), but even RealJukebox fans such as MP3.com’s Michael Robertson don’t quite believe him.

As this phenomenon takes off, whoever emerges with the dominant jukebox will have a lot of power in the music industry–and a lot of odd alliances are springing up as companies jockey for the lead position. The manufacturing giant Thomson Consumer Electronics, which owns some of the patents on MP3, recently took a 20 percent stake in MusicMatch. MusicMatch in turn licenses its MP3 technology from Xing, which was recently acquired by RealNetworks. As a result, RealJukebox now competes directly with MusicMatch. And even though Thomson’s investing in MusicMatch, the manufacturer is forging ahead with its plans to bundle RealJukebox with a powerful new music gadget. Expected to hit stores this fall, Thomson’s LYRA is the first portable device that can play multiple audio formats; even better, it will use IBM’s 340-megabyte microdrive to store up to nine hours of high-quality music.

Still, RealNetworks, whose stock price has soared from $36 per share to $221 in the past four months, can’t expect to have this technological lead for long. Thomson plans to use its deep pockets and its expertise in intuitive interface design (it created the popular onscreen channel guide for TV sets) to bring MusicMatch’s usability on par with that of RealJukebox. Sony, which has developed its own music compression and encryption technology, will surely take an interest in similar products, to say nothing of Microsoft, whose competing MSAudio format will be supported by MusicMatch and several software players like Nullsoft’s widely used program WinAmp. But in the end, you won’t really care how those battles turn out. You’ll be too busy listening to your favorite tunes to even hear the kung fu fighting.