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Would a music file be called "songname.AAC" or "songname.M4A", or am I completely off track here?

The AAC format is more formally known as MPEG-4 Part 3: Audio, thus m4a. MP3 is named so because it's MPEG-1 Audio Layer 3.

You can play MPEG-4 video (usually mp4) and audio (AAC) files in Windows Media Player if you install the MPEG-4 codecs. Microsoft isn't too interested in directly supporting such ISO standard video and audio formats that compete with their own formats. I believe FFDShow is what you're looking for.

Also, do you know if every song is available without DRM for $1.29 or just a selection?

Only for those labels that have allowed Apple to make them available that way. And the songs are 99 cents now just like the rest.

Thanks for your help. I downloaded and installed FFDShow and tried to play a sample .M4A file I downloaded, but WMP didn't want to play it. I then Googled and found a plugin called Orban; after I installed it WMP would play the sample file. I then put the sample file on my phone and WMP Mobile played it also.

I may be tempted to make a temporary iTunes account and use this card myself.