But two facts may be worth noting that makes the competition with iTunes not quite as direct as it may at first appear.
First, on iTunes, you can (usually) download a whole Album for $9.99. On Wal-Mart you can only download single songs, for $0.88. That's a pain if you want the whole album. Also, with CD's having more and more cuts packed on them these days, it also not be a good deal.
Second, the only supported format is apparently .WMA, which happens, as of now, not to be supported on the iPod. With iPod the most popular 'mp3' player, this poses kind of a problem.
Finally coupling this with the fact that the iTunes app (on Windows!) is much more pleasant to use than Microsoft Media Player, then I'd say that for now, anyway, iTunes rules.