Yahoo has struck a deal to send its existing subscription customers to Rhapsody music service from RealNetworks.

The shift will occur sometime in “the first half” of 2008 and leave Yahoo Music Unlimited’s payment plans and music libraries in tact for customers “for a limited time.” Eventually, Yahoo’s legacy customers will be required to sign up at Rhapsody’s relatively higher rates of $12.99 per month (Yahoo charged $8.99 per month or as little as $5.99 per month for a year paid in full).

To be clear, Yahoo Music will continue to offer streaming audio, music videos, web radio and other advertising-supported music offerings while integrating Rhapsody into its online portal. Only the subscription service is being shut down.

But I have been told.

“After you migrate to Rhapsody, the wireless Yahoo! features on your Sansa Connect device will no longer work. You will still be able to upload Rhapsody subscription tracks onto the device using the Rhapsody Music Software when you connect the player to your PC. “

This is very disheartening news, and furthermore, it destroys the very reason Sansa Connect users bought the players. I’ve asked for more details on this decision, but in the mean time, is it possible it’s time to ask Sandisk for refunds? Is a class-action lawsuit possible?

So, do you still think that the subscription model is a good thing? Just wait, the shake-out has only begun.