I have been kicking this idea around myself for a while, and finally decided to pull the trigger on iTM last nght, only to get the "Your library contains too many songs" message as well.
My issue is that I did extensive research, and spoke to 3 different Apple Store employees one day (we were all brain storming how it would work) to clarify how the service worked. I was told that any music that I ripped in from my CD's... if it was available in the iTunes Music Store, then those tracks, no matter how many of them, those would be matched and not count against the 25,000. If the tracks that weren't matched, THEN those songs would be uploaded and start chipping away at that 25,000 number.
In correct?
My biggest beef is how unclear it all is. I don't keep a credit card attached to my account, because I rarely buy things from the iTunes/App/Book Stores, so I porposefully bought a $25 iTunes card to apply to my account to cover the transaction. (There was aready a little on the acocunt to cover it if the charge went over $25...) Applied the credit, and then discovered that I'm not allowed in the club. So, now, not only do I have no iTunes Match... but I'm stuck with $25 in iTunes credit, that I'll likely never use. :/