After having a quick look, this looks to be a site very similar to the Russian AllOfMP3 site, but with music only being offered in the MP3 codec at a preset encoding. On the other hand, it does not look like a scam to me as I have no problem browsing through several albums and listening to samples, unlike the scammers who will not let visitors browse or see anything without signing up and then only to reveal links to file sharing services in their 'member' section (going by what I heard).
While mp3sugar has a legal notice, there is no clear indication that they pay royalties to the artist for each individual song/album sold, so chances are that they are at the same legal risk as AllOfMP3, which means that if the music industry succeeds in shutting down AllOfMP3, this site will likely become the next victim. :rolleyes:
However, as I am not aware of anyone who signed up to mp3sugar, hopefully someone else here will be able to give info on what the service is like.