as far as the distribution costs of a digital download are concerned, would be good to know how they are other than minimal (50 MB worth of space on a server and costs of upload). or is there more to it than that?

Well I'm a little bit out of the loop here, but what I understand from people "in the biz" is that the distributors who farm out digital recordings to all the various sites like iTunes, eMusic, Napster etc take a cut, and the sites themselves take a cut, just the same as distributors of real records. Just the same as I believe only a bit over 4 quid finds its way back to a label whose CD is sold for 10 quid after the VAT, shop cut and distributor cut have been removed, out of which they have to pay recording costs, artist & writer royalties and general overheads. So it seems to me that if you give downloads away for next to nothing, there's only a minor percentage of next to nothing to pay for that stuff, so nothing very ambitious is likely to get recorded in future. We'll be left with the bedroom types doing vanity productions with Garageband, which I'm sure will make the puritans around these parts very happy but not me. I quite like ambitious, well produced music.