I prefer Pandora over slacker, but it is personal preference. Since they are both free why not try both and see which one you like the best? Or keep them both and use them both as you choose.
One thing I did notice with Slacker, is that it decided to run sometimes in the background even when I had nothing to do with the app. It has been a while since I have ran slacker app though, so this could have been fixed by now.
Personally I prefer the Sirius XM app you have to download from the Sirius XM website. You get a free 7 day trial and then have to pay, but I already have a Sirius subscription so it works for me. Granted they need to fix the app to work with Froyo, but if you have a Sirius subscription go for it. Just another to add to the debate.
I have a subscription to Slacker after being a long time (5 years) Pandora user. Slacker, to me, is much more refined and will give you less "out there" music. Pandora is about 50/50 which is great since it's a music discovery service. That's the difference between the two. Slacker is streaming radio and Pandora is music discovery, although the both work pretty much the same way. Slacker is great free AND paid ($4.99/mo billed to carrier) and so is Pandora ($3.99 I believe) but for me, Slacker wins. I say try both and see what you like.
I like both as well. Pandora seems to stay on target with the type of music I listen to when I pick my station, but Slacker has a comedy station which Pandora doesn't. I use the free versions on both. Slacker seems to have a lot more adds in the free version than Pandora.
edit...
I just started trying out last fm the other day, and it isn't too bad. I did notice there are no adds!
slacker does not multitask well for me. i usually listen while driving, and need to switch back and forth between maps and slacker. eventually slacker just disappears and stops playing. pandora has been rock solid lately in terms of ramdomly stopping.