There seems to be 2 schools of wisdom regarding uploading your finished tracks to Soundcloud, Myspace et al.
The first would upload full versions of all (unsigned) tunes, at the highest allowed bitrate to let people hear exactly what the track is like and to promote themselves. The ones getting the most gain out of this method would be the audience, since they necessarily don't have to buy the track to listen to it - they could just log on to their soundcloud, myspace or whatever and listen to it whenever they are on a computer. Someone who knows what they're doing (and doesnt care about the artists getting compensated for their work) could even rip the track as an MP3 and, worst/best case, spread it on p2p networks. This is free promotion, but also eats away from any possible future "income".
The alternative is to keep your sound to yourself, minimum promotion, and to send tracks only to labels as demos - only upload lo-fi clips if you get a track out there. This way the 'free promotion' part doesn't work but obviously as the listener cant get the track from Pirate Bay or Limewire or whatever, some of them would go and buy it. We have to remember however that not all peeps who would download a track from some illegit source would pay for it if it wasn't available free.
Obviously it is much easier to use the second method if you're already an 'establihed' artists with a few releases under your belt. I'm currently struggling on which path to go for. The reality will without a doubt be somewhere between these two extremes, but I'd like to hear some thoughts on this matter.