Can't fully help you (my MP isn't up to date, so I haven't tried it myself), but you do need MP 0.2.1.0 (see here)or a current SVN. It could be in a seperate plugin, but probably someone else can advise you further.
vv Skip this post and read rtv's
Please read the first page of this thread and also this thread.
You'll need svn for the last.fm radio stream plugin as it is not yet included in 0.2.1.0
0.2.1 can be updated with svn builds but there's currently much work in progress and some broken stuff due to skin changes.. Better wait at least a few days.
The randomness level now also has an affect on the minimum "Match" needed to consider two artists similar.
Therefore setting the randomness higher should help if you do not get enough results for many artists.
In general it would be quite easy to add but given the fact that most users will not have all these tracks in their collection the amount of total "useable" tracks would be considerably below 50. This won't work very well for playlists.
Another approach would be to look up the top tracks of all your tags or neighbours...
I just need a clever idea how it should work and I'll add it