Love this genre of music - I first heard it via a grainy sounding stream - all I had was dialup back then! - late at night back in '99 from an internet station called
www.luxuriamusic.com. They play 60s and 70s lounge (and pop, surf and other fun stuff) in the day time but at night they usually play more modern stuff.
Have to mention a guy who wasn't exactly chillout but I think some chill music borrows from his work. Brian Eno's
Ambient 1: Music For Airports debuted in 1978 and it's a favorite album of mine to help me relax when I want to uh...chillout...and if I need to sleep, can almost instantly do that too! Only four tracks on the album - here's my favorite:
"1/1" - it's actually 17 minutes long(!) but it won't fit on Youtube's video format
For a very detailed breakdown of this genre and related ones, check out this awesome Flash-based site that along with insightful but compact text descriptions of the music, uses expanding "trees" to show you how the various categories are connected and when they began. But its most useful feature is all the samples is includes of all those genres (I was there for nearly two hours when I first stumbled onto it).......
Ishkur's Guide To Electronic Music - click on Downtempo to activate the tree.
FYI the animation will enlarge if you use your browser's fullscreen option.