I could not be more pleased about this news. iTunes 8.1, which was released about an hour ago, renamed "Party Shuffle" to iTunes DJ. I've used Party Shuffle for a long time as a queue of music to play for day-to-day work, and have been frustrated with Apple's Remote iPhone app and its lack of support for Party Shuffle. But their 1.2 App Store update, also released earlier today, has full support for it.
iTunes DJ divides iPhone users into two groups - guests and, for lack of a better term, the admin. The admin's iPhone is paired to iTunes as before, and they get the iTunes DJ playlist added. You can skip through songs, cast a vote (addressed below), and request songs. While iTunes DJ is playing, selecting a song anywhere else throughout the app brings up a menu asking if you want to add to iTunes DJ or play on its own.
Guests don't have to pair their iPhones to iTunes. They get to see a modified Now Playing screen, devoid of playback control. They can, however, request songs for iTunes DJ, and cast votes for songs. When they request a song, it automatically casts a vote for it.
Votes are pretty simple on the facet, but appear quite useful. Songs in the queue can be voted on by anybody. As they get voted on, they are automatically resorted in the queue by number of votes. However, you might get some guy at the party vote-clogging all night; fortunately, votes can be shut off by the admin.
All in all, this is the Big Deal feature in iTunes 8.1, and seems very well thought out.