Continuous play is a tough one when embedding into another site. Other than pop-out, there really isn’t a good solution.
For music sites, it makes sense to use AJAX to not do a page refresh, but then you are just fighting the way browsers are meant to work and Google. Of course it can be done, but it is a lot of extra work to make sure the back button works on all browsers and make sure your content is still indexable and to make sure your url structure doesn’t get completely ridiculous for people passing around links.
It looks like HTML5 will solve some of the back button issues. Google is committed to indexing Flash but I haven’t heard anything about AJAX.