Facebook resisted a few days longer than MySpace but finally has given in to the RIAA’s demands that the Project Playlist app be removed for copyright violation. It’s been a real take-one-step-forward and two-steps-back few days for Project Playlist, which also scored a big win by signing a licensing deal with Sony BMG.

The RIAA sued Project Playlist back in April and yet the company has been able to increase its funding and attract top talent since then. The start-up announced funding from Bob Pittman’s Pilot Group (Pittman joined the board) and the hiring of former Facebook COO Owen Van Natta as CEO. Rafat called the service “borderline legal” at the time; Van Natta needs to get the other labels on board to move the needle to legal.

It’s an odd construct all around: Warner Music Group (NYSE: WMG), Universal Music and EMI are suing Project Playlist with the RIAA, Sony (NYSE: SNE) is a Playlist partner now, and all four are part of the MySpace Music JV. That last, of course, goes a long way to explaining why MySpace moved more quickly than Facebook when the issue was pressed. Facebook’s rationale via MediaMemo: “The Recording Industry Association of America (RIAA) initially contacted Facebook last summer requesting the removal of the Project Playlist application for copyright violation, and recently reopened those communications. We have forwarded the RIAA’s letters to Project Playlist so it can work directly with that organization and music labels on a resolution.”

MediaMemo: “The only surprise here is that it took Facebook this long to face up to reality: There was next to no upside for Mark Zuckerberg and company in fighting the big music labels, three of whom are suing Project Playlist. But there was plenty of downside: At best, the social network would end up squaring off against potential partners; at worst, it’s conceivable that it could end up being sued by the labels as well.”