Penny Lane is the most iconic character in Almost Famous. Heck, in many ways, she is Almost Famous. This Band Aid extraordinaire is deeply mysterious, yet effortlessly disarming; immensely confident, yet infinitely vulnerable. There's a reason why William falls in love with her pretty much from the moment they meet.
To the untrained eye, Penny Lane might seem like a groupie. She'd be the first to tell you, however, that this would be a profoundly inaccurate assessment. "Groupies sleep with rock stars because they want to be near someone famous," Penny tells a confused William, when he makes this mistake. "We are here because of the music; we inspire the music. We are Band Aids."
Thus, Penny plays the role of artistic muse for Russell Hammond, the talented guitarist of Stillwater. "He's my last project," she tells William, hoping she can do her part to inspire greatness from Russell.
William, meanwhile, is totally mesmerized by the enigmatic Band Aid. In many ways, Penny embodies the music they all love so dearly. She's captivating, soulful, and romantic, full of heart and emotion—the very essence of rock and roll. Rock and roll is nuanced, and so is Penny; with Penny Lane, there is always more than meets the eye.
When Penny Lane dons her nighttime sunglasses and trademark fur coat, she becomes Penny Lane the legendary Band Aid. This Penny Lane is a total showstopper, fearless and mysterious, exuding confidence from every pore. But underneath the coat, behind the sunglasses, there is a certain vulnerability, openhearted and bittersweet. She is Joni Mitchell's "River," and she is "The Wind" by Cat Stevens.
Of course, things get complicated when Penny falls in love with Russell. Her mantra to her fellow Band Aids is one of non-attachment—people will come and go, but the music will always be there for you. Needless to say, this is much easier said than done, and it's questionable as a long-term philosophy of life.
When Russell breaks her heart, it's the end for Penny Lane the Band Aid. Whether or not her overdose was intentional, the result, either way, is the death of the Penny Lane persona. Revealing to William her real name—Lady Goodman—and leaving New York for home, she hangs up the fur coat for good. Her Band Aid lifetime has run its course.
In the film's final montage, we see Penny finally on her way to Morocco. She is going to take control now and create a new identity for herself. Before she leaves, however, she puts Russell in touch with William, as one last act of compassion toward the two men who drew so much inspiration from her. For Penny Lane, regardless of her Band Aid persona, will always remain heartfelt, powerful, and soulful—just like the music she once inspired.