Nice project, well written up. I also made an internet radio with mpd, but used a USB creative soundblaster dongle for audio out. It gives really good quality sound, but was a bit tricky to configure! The Pi onboard sound was not so good, especially at low volume I found.
Cheers, Steven.
"The time has come," the Walrus said,
"To talk of many things..."
Nice work - I love radio projects with the RPi, so much you can do if you have the time and patience.
Check out my blog (link in my signature), I have also created a radio and done a bit of a prototype/test case for it with buttons etc, and am currently (slowly!) building something a lot more aesthetically pleasing out of wood, including things like temperature monitoring and twitter integration (more of that on my YourTube channel)