The terms "online radio" and "internet radio" are slight misnomers. Radio waves aren't put on the internet. So, online radio refers to two things:
- Shows in the style of radio shows (expert analyses, question-and-answer shows, episodic fiction, etc.) that are posted as individual audio files on the internet
- Sites that broadcast a constant stream of audio on the internet, like a traditional radio station
Podcasting
A podcast is a series of episodic audio files (usually MP3s) posted on the internet, along with a special file that links to each of those episodes. That file must be loaded into a podcatcher like iTunes that will then access the audio files.
More simply, you can "subscribe" to a podcast, which loads the appropriate file into iTunes. iTunes will then display a list of all the episodes, and will automatically download the latest one. You can go back and download previous episodes if you want. When a new episode is released, the subscription file is updated, iTunes discovers it automatically, and downloads the new episode.
iTunes (or whatever podcatcher you use) can also sync podcasts to your iPod (or whatever MP3 player you use), so you can list ot podcasts on the road.
Internet Radio
An internet radio station is a constant stream of digital music, being broadcast onto the internet. Any number of people can subscribe to that stream, which works exactly like a radio station.
Technology has made internet radio so easy that regular people can set up their own internet radio stations. They just load up the server software with their own MP3s, and broadcast those on rotation.