This it not revolutionary by any means, but just an extension or the next step of what everyone is already doing. The future of radio will be online of course, but it will also include personalities you hear on today's radio stations.
This means everyone will be able to be their own program director and pick their own music, like with LastFM or Pandora, but in addition to music selection you will be able to pick your DJ or host. So you will be able to listen to your custom station and then pick your favorite DJ or host, to mix in and give you a break from the music.
DJ's don't talk about the music anymore anyway, so this will be an easy switch. The software or the listener will be able to choose how often they want someone to interrupt the music with talk, and they will also be able to be choose if they want to be interrupted with local weather, news, etc. as well.
These don't have to be typical DJ's either. They could be podcast, or just a guy from his garage. I know of a few podcast that would work perfectly in this format. Diggnation comes to mind (it's too long to take all at once anyway).
Ok you might be saying, but why? Well because these breaks help keep the music from getting boring and help you develop a connection with what you are listening to. Essentially you are becoming your own program director.
So the marketing angle? Well you will be able to insert geo-targeted audio ads, endorsements, and promotions are still an option. Plus you will be able to choose the type of listeners you would like to go after based on format and subscription data.
Will radio stations as we know it go away? Most of them will, but a few innovative ones that have good program directors will stay around programing music, but most of them will just managing talent.
Obviously this all depends on getting hi-speed wireless internet connections becoming main stream, but that is just a matter of time. Look at what is happening with the Iphone 3g.
What do you think?