At the Music Matters confab in Hong Kong, McGuinness slagged broadband Internet service providers, accusing them of aiding and abetting music piracy while CD sales and royalty payments to musicians plunge. “The recorded music industry is in a crisis, and there is crucial help available but not being provided by companies who should be providing that help–not just because it is morally right, but because it is in their commercial interest,” said McGuinness, adding that Internet service providers have been “turning their heads” away from the music industry’s troubles. “One way or another, ISPs and mobile operators are the business partners of the future for the recorded-music business. But they are going to have to share the money in a way that reflects what music is doing for their business. The music business once had to bear the accusation that it was full of dinosaurs who looked back to an old business model rather than embracing a new one,” McGuinness said. “Today, though, it is the music business that is charting the way to the future. If there are dinosaurs around today, I think they are the Internet free-thinkers of the past who believe that copyright is the great obstacle to progress, that the distributors of content should enjoy profits without responsibilities and that the creators and producers of music should simply subordinate their rights to the rights of everyone else.”

By Internet free-thinkers, McGuinness presumably means those crazy longhairs in Silicon Valley whom he accused of destroying the recorded music industry in another keynote address back in January. “Embedded deep down in the brilliance of those entrepreneurial, hippy values seems to be a disregard for the true value of music,” he said at the time. “I suggest we shift the focus of moral pressure away from the individual P2P file thief and on to the multibillion dollar industries that benefit from these countless tiny crimes: the ISPs [internet service providers] the telcos [telecom companies], the device-makers. … We must shame them into wanting to help us. Their snouts have been at our trough feeding free for too long.”

Out of the car, longhair …

Roger McNamee is very bullish on the iPhone. “It’s the most exciting thing in years,” said the longtime Silicon Valley investor. “With Apple’s identity, I think it will be spectacularly successful.”

This, of course, is an interesting product for McNamee to cheer for. Because last week, Elevation Partners, the high-profile private-equity firm that counts McNamee and also U2 singer Bono among its partners, sunk $325 million of its $1.9 billion fund to buy one-quarter of Palm. The maker of the Treo smart phone, of course, could take a big hit if the iPhone lives up to its hype and dominates the market for high-end, heavily featured mobile devices.

Still, McNamee, whom I interviewed here a few weeks ago, keeps reeling off a bunch of non-Palm smart phones he loves–he tries all of them and often wears several in high-tech style (not!) on his belt.

“I loved the BlackBerry Pearl, and Motorola and Samsung have done some cool stuff and I liked a lot of the features on Helio’s new Ocean,” he said. “And that iPhone will probably be a huge hit does not bother me at all, because this is not a zero-sum game.”

McNamee’s theory is simple–although only a small percentage of all phones sold are smart phones, he expects that to eventually be 100%, because, he posits, “in the end, what matters is what you carry on your body.”

So, even if Palm, which is a small player compared to competitors like Nokia and BlackBerry-maker Research in Motion, comes in third or fourth, that, said McNamee, is “not so bad.”

Not that he expects that kind of also-run status for Elevation’s investment. So to help buoy Palm, along with the big pile of cash, he will also join the board and has brought in two former Apple executives, too–former CFO Fred Anderson and former hardware head (think iPod) Jon Rubinstein.

Anderson is also a partner at Elevation and Rubinstein will serve as executive chairman and also run product development at Palm.

“We offer committed value insight and want to be a partner to management and shareholders, but, most of all, we want to help foster a culture of radical innovation,” said McNamee. “I am a huge believer that you have to be able to experiment to be able to innovate and you even need permission to do so.”

The $325 million buys a lot of permission, of course, and was, said McNamee, an unexpected opportunity. The deal was hatched about seven months ago, when McNamee was called by Palm CEO Ed Colligan, who was seeking good advice about Palm’s options.

While McNamee admits he was not a regular user of Palm products, although he did try them out, he was impressed by Palm’s years of large accomplishments compared to its size.

Nonetheless, the company has been under a lot of pressure to perform better and also do something to lift its lagging stock price. With a huge hoard of cash and even the possibility of being sold to a bigger player, Palm was receptive when McNamee proposed a different tack.

Under terms of the new restructuring deal, still to be approved, Palm’s existing shareholders will get almost $1 billion in cash (the money from Elevation, some new debt and cash from Palm’s kitty) to drop their stake to 75%.

What McNamee said he is buying is a company great at both software and also hardware, which he thinks need to become even more tightly integrated to make products seamless.

“All the really successful products are like that, because someone has to take responsibility for the whole thing,” said McNamee. “And product change has to be the rule rather than the exception… with the goal, of course, to have an incredible device everyone wants to own.”

That might be the goal, but Palm’s latest device, unveiled at D5 last week by Palm’s co-founder and top product guru Jeff Hawkins, called the Foleo, was not well received.

The “phone companion”–which sounded naughty to me when I heard it described thus–was thought by many I spoke with to be too large and not feature-rich enough to be useful.

McNamee understands this, but said Foleo was only a starting point. “It is a good thing for a company to try new form factors, and Foleo is an excellent first step,” he said, even though he admitted the device probably does not represent a very big market.

But he liked the effort involved in its conception.

“Innovation is not a matter of always hitting a bulls-eye on the first shot,” he said. “So I hope we’re there to help Palm be able to keep trying.”

His newest private equity investment firm, Elevation Partners, has $1.9 billion to dole out and U2 rock legend Bono as one of its partners (and who apparently works from Dublin). So far, its investment team has been using that cash up at places like business magazine Forbes, the real-estate site Move.com and several gaming companies.

McNamee calls Elevation like a “midlife VC fund,” looking particularly at sectors like business, women, sports, real estate and any place on the Internet “where there are real content gaps.”

I talked to McNamee about the Forbes investment, for example, which was greeted as an unusual move. The Web site is a main focus of McNamee’s interest, as it attracts huge traffic and is seeking to have a much broader impact in the business-news space than its print origins. McNamee thinks it could become even more of a global business brand.

In addition, he had some thoughts about the ubiquitous browser, which he called a “Rube Goldberg device, except with rust.” He called on Microsoft–if it really wanted to be bold–to “obsolete the browser and really do the Web without it.”

Noting that the software giant was “running out of chances to influence the outcome” of the tech industry, he thought Microsoft could reinvigorate itself by “making business applications look like consumer ones, where the real innovation is now taking place.”

He had other thoughts, of course, including a suggestion that Yahoo stop focusing on search monetization and pay attention to its other assets and contemplate how and when current tech darling Google could stumble (“but not for a while,” he noted, given their still exploding ad business).

But here’s a taste of McNamee from another little video I made: