Is playing Pandora in a party acceptable?

Portions of Pandora's TOS regarding applicable licenses:

"2.1 License Grant. Pandora grants to you a limited, non-exclusive, non-transferable license to access and use the Pandora Services in the United States for personal non-commercial purposes only. Pandora also grants to you a non-transferable license to use the Licensed Application on any iPhone or iPod Touch that you own or control as permitted by the Usage Rules set forth in Apple's App Store Terms of Service. If you subscribe to any of the Pandora Services or the Licensed Application, this license is contingent upon your payment of any applicable subscription fees and your compliance with any other terms and conditions applicable to you as a subscriber. Any violation by you of the license provisions contained in this Section 2.1 may result in the immediate termination of your right to use the Pandora Services and the Licensed Application. Pandora reserves all right, title and interest not expressly granted under this license to the fullest extent possible under applicable laws. ANY USE OF THE PANDORA SERVICES OR THE LICENSED APPLICATION NOT SPECIFICALLY PERMITTED UNDER THIS AGREEMENT IS STRICTLY PROHIBITED."
"4. COPYRIGHTS

As between you and Pandora, you acknowledge that Pandora owns or has a license to all title and copyrights in and to the Pandora Services and the Licensed Application. All title and intellectual property rights in and to the licensed content in the Pandora Services and the Licensed Application is the property of the respective content owner and may be protected by applicable copyright or other intellectual property laws and treaties and subject to use restrictions under such laws or treaties."

I think that as long as the number of attendees is small enough, using Pandora is OK. Maybe they have to be relatives or just friends.

That's a good question. All the advertisements kill the mood though. I would just see what songs Pandora would play for your party and them get them in a playlist somehow.

It's okay with the copyright. It's also okay if people at the party don't care about ads.

You are all right if you aren't getting paid for the party. If you are using your house as a venue for a party and got an ABC license to be totally legal and charged a cover charge, your party may be too big. Playing Pandora at a bar you own would be like playing a radio station at a bar--you need a special arrangement with Pandora to be legal (but probably won't get in too much trouble for breaking that rule--you'd have to be caught by exactly the wrong person).

Under US copyright law it's not "public" if it's your family and "small number of usual associates", i.e., friends. If you invite 200 people you don't know, you would need a commercial license.