Somewhere between Napster and Kazaa on the historical timeline of online music sharing, there was Audiogalaxy. It was a great Web-based service that offered tons of high-quality and rare MP3s before it ran into some legal trouble and was shut down.

We’ve missed it, sure, but now it’s back, and this time it’s turning your computer into a streaming music server, giving you access to your home library from wherever you are: on any computer and even on your iPhone and Android smartphone.

Update: Audiogalaxy founder Michael Merhej got in touch and had this to say on the status of the site and the service:

Unfortunately we haven’t launched yet and have been testing the service with limited users. We’ve disabled new signups and are a couple weeks away from opening our service to the masses. We are moving into a colo-facility soon with starting bandwidth capacity of 300mbit which will allow us to open the floodgates.

When we visited the site last night, we didn’t notice anything saying it was in beta or wouldn’t be open to the general public and quickly signed up. For those of you who didn’t get in, we guess the only thing to do is to wait.

The first thing to note is that this is not the cloud-based music service we’ve been waiting to see. In order to work, the computer with your music library needs to be on and connected to the Internet – not asleep, hibernating, saving power or being even slightly environmentally friendly.

The program works by installing a client on your home computer which scans your hard drive for music. Then, either via the Web interface, the iPhone App or the Android app, you can access and play your music from anywhere.

The website is supported on the latest versions of Internet Explorer, Firefox, Safari and Chrome, and there’s no limit to the size of the collection you can share. The company says it has successfully used Audiogalaxy with a collection of more than 80,000 songs without a problem. The service is is completely free, both on the Web and on your smartphone, and although the company’s FAQ mentions paying for “uninterrupted access”, we happily listened to an entire Radiohead album without any problem. We were also happy to find that the playing continued in the background when we switched out of the iPhone app.

For some people – those who rely on streaming music services like Pandora or MOG – the service may not really offer any benefits. If, however, you have 100 gigs of music sitting at home and you want to access it from your 16GB iPhone, Audiogalaxy is a sure winner. It’s like having it all right there on your phone, with an easily navigable list of artists, albums and playlists that you can create using the website.