Like Napster, you knew it couldn't last. Facebook has killed off the Audio application for copyright violations, making it one of the first 3rd party apps to get the chop. We'd previously heard that audio was no longer showing up in the App directory, but now it has gone entirely from the site.
Essentially, Audio allowed users to upload MP3s to Facebook and share them - even though uploading copyrighted MP3s is illegal, and your name could be easily linked to the uploads, the app flourished and gained 750,000 users. The Audio app was removed completely last night.
It's interesting to ask who is liable for illegal apps: you'd assume the developer, but user-generated code is a little less clear cut than user-generated content. Facebook needs to enforce its terms of service to stay in the clear. But it's also good news for apps like iLike, which appear to be legal and now have an even stronger grip on the music-in-Facebook market.