That would be HD Radio, and it is not compatible with OG radio. HD radio is still pircey. Zunes would be more expensive if that were it. Also, HD radio uses different radio stations (by the numbers on the dial).
my moms stereo in her car tells her what song is playing and what artist and I'm pretty sure she doesn't get "hd radio".
Yeah, newer regular radios have the ability to pick up station and song info if the station is broadcasting that stuff. My buddy has a radio that does this and it's not HD radio.
HD radio is (I assume) broadcasted on a different piece of the spectrum (with presumably less interference) and it also allows for a lot more stations. There are HD versions of a lot of stations around here and they advertize that there are stations up that they run that aren't available on regular radio.
I don't think the audio quality is anything better than cd or even satellite radio but it's probably cleaner than regular radio. I imagine it sounds like a steady on or off signal like satellite radio. I'm not sure if it's compressed like satellite is, though. I've never heard hd radio myself but their proliferation is basically guaranteed now that satellite radio merger requires all satellite radios to be manufactured with hd capability.
So soon all car radios will be hd radios one way or the other.