Just tossing in a few cents here...
I think the internet radio idea is a pretty bad one. There are about 7 something billion people on the planet right now, and they all have a different taste in music. Offering 12 stations on the BDP will only cover the musical taste of one person: the one programming them, who obviously will not be the same person giving it a home in his or her rack.
Next to that there is the transport problem. How do you know that the internet connection from the user is good enough to actually guarantee an uninterrupted stream without the need to buffer every 20 seconds? I am on a pretty decent connection here, but any station over 256 kbps needs to "buffer" every 20 to 30 seconds or so, simply because the connection between here and the sending server is not good and or fast enough.
It also raises a few eyebrows... You do not allow for streaming from a computer because of "bandwidth problems" (even though a blu-ray signal is transferred over most home networks without any problems) but when it comes to radio things suddenly are no problem? Kinda makes me go "hmmm..."
I'd say: work on other issues first. Like the whole indexing thing. Add the small "write" function which places the whole index on the USB drive/stick, so that it does not have to load for quite some time. Get it to accept NTFS formatting. And other things like that...
