I just took my first pass at a Genius playlist in the new iTunes. I started with:
"Fly" - Moxy Fruvous

I clicked the Genius button, and it quickly created a playlist with the following as the first three songs:
"Learning to Fly" - Pink Floyd
"Butterfly" - Smile.dk
"Flying Condor" - Cusco

Truly, this new functionality is stunning. I only wish I could get a behind-the-scenes peek at whatever complex algorithms they're using to build the lists!

(To be fair, it did better when I re-tried the same song, but that first one made me giggle - it's practically what I would've seen if I typed 'Fly' in the search window!)