I don't think there is any geographic area putting out as much interesting music right now as Scandinavia, more particularly Sweden and most particularly, the city of Gothenburg, where every resident must be in a band and have a MySpace site.
Most of the music is melodic pop with roots in the Indie pop of 1980's England. (Some call it twee - one blog referred to current Swedish pop music as "Swee.")
But even in that context, many artists are finding ways to either subvert the genre or totally modernize it. (The two most striking examples are Sally Shapiro and her producer, Johann Agebjorn, and the post modern crooner, Jens Lekman, who's album Night Falls Over Kortedela, has been alternating with the latest Okkervil River album as my favorite of 2007.)
Scandinavian pop is like music porn. Once you start listening, you can't stop. I find myself at my computer, late at night, the lights off, everyone else asleep, with headphones on, frantically clicking from one MySpace site to another, listening to snippet after snippet of brilliant pop music from one band from Gothelberg after another.
Here are songs from two of the (at the moment) more obscure of the many amazing bands that make up the population of that city.
The Dreamers - All Across This City
Boat Club - Warmer Climes
Boat Cub on MySpace. The Dreamers on MySpace.