Here it is 2012, and I'm writing about cassette tapes. New music on cassette... who would have thought? In the last couple of years quite a few small tape labels have been springing up - mostly making small editioned tapes in numbers of fifty to one hundred. The appeal of this format is the cost (most I've bought have been around $4-6 with shipping), the fuzz/grain of the tape, and of course probably a little nostalgia. There's also some appeal to having an object rather than just digital files. Personally, I like to bring my little tape player with us camping and on road trips.
I don't think every new album would sound good on tape, but this format is favorable to a lot of the music coming out on cassette. Most of the music I buy on tape is quiet, ambient, drone, field recordings, etc and are well suited to the format. Recently I purchased a couple from Avant Archive - who is selling any of their tapes made prior to this year for half off (making them five bucks with shipping within the US). The Olli Aarni tape is beautiful - I highly recommend it. If you don't have a tape player you can get one at a thrift store for a few dollars- so all together you would have the tape, and the tape player for the price of one LP. If you're not sold on the idea of going back to tapes, Avant Archive offers their albums in digital formats as well (The Olli Aarni album is only $3).
A few other tape labels doing good work that I'd recommend include Bridgetown Records, Wil-ru recording company (who has the awesome Morriconez tape), Sweat Lodge Guru, Hooker Vision, Space Slave Editions, Fadeaway Tapes, Goldtimers tapes, and Mirror Universe (who released the new War on Drugs album with an exclusive b-side).