Dave and I have been discussing why Apple should or shouldn’t release an iPod with FM radio, (but it really also applies to Satellite.) The long and the short of it is, if they sell 2% more devices, and it creates less incentive to browse the iTunes music store, then Apple loses out.
It’s entertaining because of Dave Winer’s predictions. While I’m not really sure how serious he is about them, there certainly is a little bit of possibility that they will occur. Regardless, I can’t see the radio appearing on an iPod anytime soon.