Previously available in Windows Phone 7.x, FM radio support curiously dropped off the face of the earth in the initial shipping version of Windows Phone 8. But it's back now with the recently released GDR2 update for Windows Phone 8.
Note: Since I just wrote about this topic for a recent update to Paul Thurrott's Windows Phone 8, this is an excerpt from that free eBook.
The Radio item in the Windows Phone 8 Music + Video hub's main screen links to a nice FM radio interface which lets you listen to live radio, and create and access favorite radio stations.
Note: FM radio is not available on all Windows Phone handsets. It requires a phone with an FM radio antenna, for example, and the support of your wireless carrier. And FM radio will only work when you have plugged in wired headphones as it uses the wire as an antenna. But this means you can't listen to live radio through Bluetooth headphones or speakers. As you'll see, however, you can switch to the internal speaker for playback, assuming you leave the wired headphones plugged in.
Find a radio station
To find a radio station, swipe or flick left or right on the virtual radio dial at the middle of the screen. If you swipe, the dial will turn slowly and let you find more stations. But if you flick, you will move between those stations with the strongest signals only.
Many stations display information about the station and the currently-playing content.
You can also navigate between stations using the Rewind and Forward buttons in the mini-playback control overlay. To access this interface, press the Volume Up or Volume Down button on your handheld.
To navigate to the next available station, tap the Forward button in the mini-playback control overlay. To navigate to the previous available station, tap the Rewind button.
Add a station to favorites
Like Internet Explorer, the Photos hub, and other experiences in Windows Phone, the FM radio lets you save favorite stations so you can find them more easily in the future. To add the current station to favorites, tap the Add Favorite button in the top left of the FM radio screen.
Remove a station from favorites
To remove a station from favorites, navigate to that station and then tap the Remove Favorite button in the top left of the FM radio screen.
Access your favorite stations
To access your list of favorite stations, tap the Favorites button in the bottom left of the screen.
This will display the Presets screen.
From here, you can tap a station to listen to that station, or tap Back to return to the previous screen.
Pin a radio station to the Start screen
In addition to adding stations to the favorites list, you can also pin favorite stations to the Start screen. To do so, navigate to the station and then tap and hold on the station number in the middle of the screen. Choose Pin to Start from the menu that appears.
Pinned radio stations appear at the bottom of the Start screen. From here, you can resize, move or delete the pinned tile.
Pause live radio
To stop playback temporarily, tap the Pause button at the bottom of the screen.
The Pause button changes to a Play button. You can tap this button to resume playback.
Switch to the internal speaker
While FM radio does require you to plug in a wired headset to function, you can optionally switch the playback from the headset to the phone's internal speaker. To do so, tap and hold on the station number in the middle of the screen and then choose Switch to Speaker from the pop-up menu that appears.
Later, you can perform this action again and choose Switch to Headset to reverse the change.
Configure FM radio for your region
The FM radio feature should be configured correctly for your own region, but if you travel, you may wish to configure it to work with the region you're visiting. To do so, tap and hold on the station number in the middle of the screen and choose Settings from the pop-up menu that appears. In the Settings screen, choose from between the available regions: North America, World or Japan.
Paul Thurrott's Windows Phone 8 is a free eBook and my gift to the Windows Phone community. --Paul