With Sky Radio you could play all your audio files from SkyDrive, takes full advantage of the cloud.
First, you need upload all your music collection on SkyDrive using some app available in https://apps.live.com/skydrive
You can create playlists, play full albums, browse all the albums of a particular artist.
Saves space on your Windows Phone 7 storing your entire collection in SkyDrive and access from anywhere.
If you have a Windows Live ID (hotmail, xbox live, etc..), You have a lot of free storage on SkyDrive, perfect for storing all your media library.
Just upload your content and play it with this app.
Enjoy it.
*This app does not play DRM content.
*This app does not allow downloading files, playback only.