Qtrax wasn’t exactly a household name among music fans, or for that matter, among music industry executives. At least, not until this week.

Unfortunately for Qtrax, the service’s name is now on everybody’s lips, but for the wrong reasons.

Owned by Brilliant Technologies Corporation and billing itself as the first peer-to-peer service to have major label backing, Qtrax execs described on Sunday an advertising P2P environment where up to 25 million individual songs would be available. The service also spent close to $1 million to spread the gospel at this year’s MIDEM in Cannes, France, including hiring James Blunt for an after-midnight concert.

But there was just one small problem. Or one problem multiplied by 4, the number of major record labels. As soon as Qtrax’s press announcements found their way to mainstream media, record company execs were saying they had not signed off on any deal with the service.

Warner Music Group was the first label to contest Qtrax’s claim. On Monday the label issued a statement that it “has not authorized the use of our content on Qtrax’s recently announced service.”

Universal Music Group and EMI quickly followed WMG’s lead, but did say they were “in discussions” with the service. According to London’s The Times, Sony BMG also said they had discussions with Qtrax execs but no deal had been reached.

So, other than making complete fools of themselves, not only in front of the entire world, but also in front of the labels they want to sign up, just what the heck is Qtrax, anyway?

Qtrax launched as a Napster-like P2P in 2002, but quickly shut down to avoid legal problems. In this week’s announcement trumpeting its free music service, Qtrax said songs would be wrapped in Microsoft’s digital rights management technology, thus making downloads incompatible with Apple’s iPod. However, the company promised it will implement a way to to get around the iPod compatibility issue in the near future.

But then, Qtrax has said a lot of things. Major label support, 25 million free songs and future iPod-friendly downloads were the major talking points in the service’s premature announcement. Whether Qtrax is capable of making good on those promises is anybody’s guess, but it wasn’t helping its cause when it claimed major label support even though it didn’t have one signed deal.

But you gotta admit, more people know the Qtrax name this week than last week. And what’s that old line about any publicity is good publicity as long as they spell your name right?