A lot of people think the death of the radio has been the iPod. I don't agree. iPods are just too much work for Joe Consumer. You have to pick your songs, download them, organize them, upload them… it's a hassle.
Exactly the reason I don't use my iPod anymore. It is just a PITA to organize all that, pull out the boring songs you are tired of, find new stuff, and pay good money for all this. My Audi even has a SD memory slot and I can play my music from that, but since buying a SD memory card for it and putting some of my songs on there, after a week the only thing I use it for is audio books on very long trips alone.
I listen to quite a bit of analog radio. In the SF bay area there are quite a few good stations that I like, and even a new country station that is pretty good. I find i get tired of them quickly, but it works a whole lot better than fiddling with mp3s. Sound quality is so so but I can deal.
I also have XM radio, and I get it for free. I'm not sure why, it just worked when I got the car and has for 2 years. I initially thought I had a 3 month trial subscription, but it just keeps on going.
Maybe my car came with a 3 year free subscription, but I never even had to register for anything. I find XM really nice when I travel out of my standard radio reception, and I use it mainly for talk radio to catch the news, or a program that I wanted to listen to, or just to get away from the boring old music I always listen to. There are a few good music stations, but their play lists are small.
The most disappointing thing for me with XM radio, is the sheer crappyness of the audio. The talk radio stations have the audio fidelity of a telephone, maybe worse, and the music stations are severely compressed to the point of being unpleasant to turn up past ambient listening volumes. There is a severe lack of clarity, highs are missing, mids are compressed, and the bass is muddy and lacking. I can immediately tell the difference between an analog broadcast and XM radio, the analog broadcast has much better sound quality and it easier to listen to, as long as the signal is strong. Actually a week ago I found that both XM and a local station were playing the same song, and nearly at the same point in time, so I switched back and forth to really get an idea about the difference, and the analog station was so much more dynamic, much more clear, and hugely superior to the digital XM. Maybe it is my XM tuner in my car, a Audi S4 with the premium Bose audio (it actually has tweeters so it sounds pretty good for car audio) but I could never listen to music this bad in my own house.
At home I listen to quite a bit of internet radio, mostly Yahoo LaunchCast, and I find the sound quality pretty good. Not nearly as good as CD, but it works for non critical listening. I wonder about the comparative quality of XM vs Internet radio. I've heard that XM is 32 kb/s for talk, and 64 kb/s for music stations, while most of my internet radio stations are 128kb/s, and even some up to 160-192 kb/s.