Apple has celebrated the first birthday of the iTunes Music Store in style by launching a new version of iTunes that provides access to the third generation of the digital download service.

The revamped Music Store now features QuickTime music videos; allows users to upload, share and rate their iTunes playlists; and makes changes to the way that digital rights are managed. Purchased music can now be stored on up to five different computers (up from three), but the same playlist can now only be burnt seven times (down from 10).

The non-Music Store related parts of iTunes have also been improved, with a new feature allowing users to print CD jewel case inserts, a ‘Party Shuffle’ feature for creating automated playlists and a new lossless encoding format.

“iTunes has exceeded our wildest expectations during its first year,” said Apple boss Steve Jobs. “Our third generation iTunes Music Store just blows away any other online music service,” he added.

Sadly for UK Mac users, there is still no firm date set for a European roll out of the service, although Jobs did say that Apple was targeting a date later this year. Problems agreeing on licensing terms with the European music labels are understood to be holding the launch up.

Apple launched the iTunes Music Store, which charges 99 cents per download, in April 2003. Since then Apple has seen competition from a resurgent Napster, Microsoft and Sony. Apple’s service is buoyed by a catalogue of over 700,000 songs and has sold over 70 million downloads in its first 12 months, giving Apple a respectable 70 percent market share of the legal downloads market at time of writing.