The easy and flexible way to add an MP3 player in your Blog's sidebar.
No, currently we do not offer other functionalities. (We might, in the future) However, the fastest quick fix around that is to convert your music format from wma, wav, etc to MP3. (You can see many types of converters here: http://www.google.com/search?num=100&hl=en&safe=off&site=&source=hp&q=mp3+converter )
WordPress has an in-built upload feature! Login to your admin panel, then go to Media > Add New on the sidebar and upload your MP3.
As of now, no. We are currently working on implementing a full playlist.