Location-based social networking services ruled the discussion during the opening weekend of SXSW as they used the chaos of the festival to showcase their capabilities.

With so much going on at once, knowing who is where at any given time helps the crowd-followers make better bets on what to see and where to be seen. Soundtrackr, a streaming music service that lets users attach songs to specific locations, released a mobile map that tagged several artists and their songs to venues where they'll be appearing over the course of the week. Twitter, in the week prior to the shows, added geolocation data to updates. FourSquare - which made a splash at last year's event - is defending its space against newcomers Gowalla, Loopt, Brightkiteand Whrrl. Many of these services are holding scavenger-hunt challenges where attendees use their service to find hidden items for cash and prizes. Ironically, FourSquare and Gowalla scheduled competing parties at the same time, meaning the interested can follow which is bigger and better by monitoring their respective apps.

- Access to celebrities, influencers and tastemakers is driving LBS companies to SXSW this year, according to the USA Today. Quoting Dennis Crowley, co-founder of Foursquare "All the early adopters (of technology) and Internet celebrities are here to find cool apps and share them with everyone else."

- Foursquare, along with Gowalla, are the two main rivals in this space. The differences between them are examined at ZDNet: FourSquare gets points for simplicity and better games, while Gowalla has the sexier interface (and is an Austin-based company).

- Merging the ability to know where someone is with what that person thinks about where they are is the fuel that will drive both LBS and micro-blogging services like Twitter. But, as the Wall St. Journal points out, the big question will be how these services earn money.

- CNET has a good round-up of which venture capitalists invested in which services, with their thoughts on the SXSW showdown.