Two weeks ago, I wrote a Rhythmbox plugin to automatically change my Gossip status so that it displays the currently played song. I was amazed that it was possible to achieve this so easily, thanks to python and D-Bus. Here's the mandatory screenshot:

Gossip Status plugin for Rhythmbox

(Looks quite weird to see the tooltip and not the mouse cursor, doesn't it?)

There are of course small issues to fix: I don't know if it works with the latest python bindings for D-Bus, and quitting Rhythmbox/stopping the music leaves you with an empty status (that's a small Gossip bug).

You can install it with only a few steps: download the tarball and move the directory it contains to ~/.gnome2/rhythmbox/plugins/gossip. Enjoy!

Update: new tarball that should work for more people.