Former Facebook exec Owen Van Natta will take the CEO job at a music discovery site called Playlist, a move that had been speculated last week, after he did not end up taking another position as head of MySpace Music.

Van Natta’s arrival at Playlist was not the only news for the Palo Alto, Calif.-based start-up–former AOL exec Bob Pittman’s Pilot Investment Group is also investing an undisclosed amount of money in Playlist. Pittman will also join its board.

Playlist has previously raised several million dollars, said sources, but the new funding is many times that, to total about $18 to $20 million.

The move to Playlist is an interesting one for Van Natta, who has looked at a number of jobs since leaving the high-profile social-networking site earlier this year.

He has talked to a wide range of companies, sources said, including Microsoft (MSFT) and a range of start-ups, as well as with MySpace, which is owned by News Corp. (NWS). (News Corp. also owns this site).

Those talks between Van Natta and MySpace to run its new music initiative did not pan out for a variety of reasons.

But he has long expressed a desire to become a CEO of a company, rather than just head to another executive job within a larger company, so the move to run a start-up is not a surprise.

In an interview this afternoon, Van Natta told me he got very intrigued by the possibilities at Project Playlist, which was the first iteration of the start-up and in which he is an investor, due to its viral growth.

And, indeed, Playlist has grown quickly to become one of the larger music communities on the Web, claiming that more than 38 million music fans monthly, sharing playlists via its Web site and also widely distributed embeddable widgets. The site has tens of millions of daily page views, according to surveys.

To get to those big-scale numbers, Playlist essentially has offered users a giant linking service for music, not unlike Google (GOOG) with all information, pointing users to promotional, free and sometimes illegal music and music video tracks all over the Web.

Those links to illegal music have resulted in a lawsuit aimed at Playlist from the music industry, sources said, a sadly typical experience of many online music services.

The usual tactic for the music giants: Sue first and shake down later.

Under Van Natta, I would guess, Playlist is likely to reach out to music companies and strike deals.

The company also needs to settle on its main business plan, which appears to me to have been less important than its explosive growth.

Playlist currently does have some small amount of advertising on the site, and seems to be making most of its scratch from sending leads to ringtone sellers.

Van Natta did not want to reveal specific strategies for Playlist going forward, only noting the opportunity is large.

“Discovery around music is exploding on the Internet,” said Van Natta. “And the company that does the best job of taking advantage of that is really going to be huge.”

That said, there have been a lot of music-aimed efforts like Playlist in the music space, with a lot of different business plans and varying degrees of success, ranging from the Apple (AAPL) behemoth iTunes site, which sells single songs, to the CBS (CBS) music service, Last.fm, which relies more on advertising revenues.

Other contenders in the space include the Rhapsody subscription service from RealNetworks (RNWK), music discovery service iLike and many others. MySpace has also waded deeply into the music space, and Facebook is also reportedly weighing its own service.

Van Natta was one of Facebook’s earliest and most prominent execs, serving in jobs like COO and also Chief Revenue Officer while there.

He came to Facebook in the fall of 2005, after a stint as VP of Worldwide Business and Corporate Development at Amazon, and was part of the founding team of A9, the Amazon search company.

“I am excited to be building a company again,” said Van Natta, who has taken many months off since he left Facebook in February.

G.ho.st, which stands for “Global Hosted Operating System,” is claiming it has a pending trademark registration for the tagline “no walls.”

G.ho.st has used the phrase for almost 18 months and is alleging that it pertains specifically to operating systems (as shown in the screenshot here).

In a letter sent earlier this week to Microsoft CEO Steve Ballmer and many others, which BoomTown has obtained, G.ho.st CEO Zvi Schreiber claims that the software giant has violated G.ho.st’s pending trademark for the ad phrase “no walls” and asks Microsoft (MSFT) to remove it from the company’s marketing materials.

Microsoft’s advertising campaign, which launched this month and had a rocky start with poorly received commercials featuring comedian Jerry Seinfeld and Microsoft Founder Bill Gates, uses the taglines “Imagine No Walls” and “Life Without Walls” to tout its Vista operating system. (See a screenshot of one example below; click on it to make it larger.)

G.ho.st, which is hosted by Amazon (AMZN), is yet another of many attempts to make cloud computing real and is competing to grab customers from the software-based Windows powerhouse.

A Microsoft spokesman, in an email to me, dismissed G.ho.st’s claims.

He said:

“We are aware of their concerns and believe their claims have no merit. We are not aware that Ghost has any trademark registrations or other rights that would be infringed by our ‘Life Without Walls’ campaign. To our knowledge, the right they have asserted, namely, a U.S. ‘registered trademark application,’ in the phrase ‘No Walls,’ does not exist.

“To our knowledge, Ghost has no trademark registrations or other rights in the phrase ‘No Walls.’ Even if they did, they cannot prevent others from using the words ‘no walls’ together in a sentence or in a descriptive manner in ad copy. Nor can they claim ownership in word ‘wall’ or the idea of a wall. The tagline for Microsoft’s new ad campaign is ‘Life Without Walls’–a slogan that, taken in its entirety, is not confusingly similar to Ghost’s purported ‘motto.’”

G.ho.st launched at our D: All Things Digital conference this past May (where Ballmer and Gates also appeared).

Here are two videos showing the start-up’s whole demo:

And here’s G.ho.st CEO Zvi Schreiber’s full email letter to Ballmer (with email addresses and other personal information redacted):

From: “Zvi Schreiber (G.ho.st)”
To: [Steve Ballmer]
Cc: [redacted]
Sent: Wednesday, September 24, 2008 12:15:41 AM (GMT+0200) Auto-Detected
Subject: G.ho.st Virtual Computer NO WALLS trademark

But–as many readers have requested–they will all be available in their entirety in this column.

In the less contentious spirit of DEMOfall and TechCrunch50, two demo conferences taking place simultaneously this week, we’re happy to bring you all the demos we had onstage at D6.

Last, but not least: the G.ho.st Web operating system, which lets users access their desktops from any computer with an Internet connection and is also a joint technology venture between Israelis and Palestinians.

The video of the G.ho.st demo is in two parts.

In part one, CEO Zvi Schreiber shows off the “Global Hosted Operating System,” which is hosted by Amazon, yet another if the many attempts to make cloud computing real.

In part two, Zvi goes over the various features and applications of the G.ho.st product and discusses the business plan and how the Israeli-Palestinian collaboration works.