According to The Register (via Boing Boing), it is possible for multiple users to share a Napster account--thus saving money by paying only one subscription rate.
The Register says that Napster is thus losing money by failing to take safeguards (like preventing multiple folks from being signed in simultaneously to the same account).
But there are alternative explanations: (1) it may be too cumbersome to prohibit this, without irritating legitimate users.
Or (2) Napster may have decided that permitting this encourages more people to sign on--the marginal cost of the additional downloads may be almost zero. This way, Napster has effectively negotiated a much smaller download royalty from the record companies--depending on whether Napster's royalties are based on the number of subscribers or the number of downloads. If the latter, then Napster indeed has a strong incentive to prevent this kind of behavior.