Check this website:
http://hollywoodrecords.go.com/greysanatomy/
There's a blog from the music coordinator and it's like he chooses the music that will fit in the show as Wheels said. IMO the music they play in the show is always great and I have already discovered new artists thru them, like this Kate Havnevik for instance, worked for me, got her album because I heard her songs in the show...