I'd never heard of this before. It's fascinating stuff, really. All the "work" occurs within the software running on a standard computer (OS X, Linux, BSD, or Windows). This allows the specialty hardware to be simplified to merely capturing signal and converting it to a digital form that can be manipulated by the attached computer.
This is a great example of how lowering the "barrier to entry" (cost, technical expertise) of a technology has the potential of providing great benefit for ordinary citizens. Want to record radio or television? This tech will do it. Want to build your own HDTV receiver for your home entertainment system? This tech will do that too. Want to experiment with some revolutionary wifi networking and maybe invent the "next big thing? This gear is ideal for prototyping such ideas.
GNU Radio - The GNU Software Radio
GNU Radio is a collection of software that when combined with minimal hardware, allows the construction of radios where the actual waveforms transmitted and received are defined by software. What this means is that it turns the digital modulation schemes used in today's high performance wireless devices into software problems.
WHAT IS A SOFTWARE DEFINED RADIO?
Joe Mitola says, "A software radio is a radio whose channel modulation waveforms are defined in software. That is, waveforms are generated as sampled digital signals, converted from digital to analog via a wideband DAC and then possibly upconverted from IF to RF. The receiver, similarly, employs a wideband Analog to Digital Converter (ADC) that captures all of the channels of the software radio node. The receiver then extracts, downconverts and demodulates the channel waveform using software on a general purpose processor." 
For our purposes, on the receive side, the idea is to get a wide band ADC as close to the antenna as is convenient, get the samples into something we can program, and then grind on them in software.
CAN YOU GIVE ME AN EXAMPLE?
To get a better idea of what we're talking about, please see the screen shots and examples. They range from playing a sine wave out a speaker, a single channel FM receiver, a display of the real time Fourier transform of the signals from a high speed analog to digital converter, to an application that receives two broadcast FM stations at the same time from the same input.
GnuRadioWiki is a collaborative attempt to explore, document and expand the use and development of GnuRadio.
The UniversalSoftwareRadioPeripheral (USRP) is a low-cost, high speed implementation of GnuRadioHardware, developed by a team led by MattEttus. You can buy your own USRP(s); see [www.ettus.com]. The price for the motherboard is $550, and basic daughterboards cost $75 each.
Ettus Research LLC
Matt has been working in wireless design for 8 years, and has extensive experience in ASIC-, FPGA-, and software-based DSP systems, as well as System-on-chip RF architecture and board-level RF design. Matt's resume is available on request.
The USRP motherboard is US$550, and includes a USB cable and power supply. The supply is a universal switching type which works on 90-260 VAC, 50/60 Hz, so it will work internationally with a US-type plug converter. Please see the USRP Sales page for more details.
Live Online GNU Radio Demo
Charles Swiger has created an online demo of GNU Radio. You can even tune it from this web page and listen with an MP3 Player!
Charles Swiger's USRP Experiments
Charles has a lotof good info on his page about his adventures with GNU Radio and the USRP
GNU Radio Opens an Unseen World
02:00 AM Jun, 05, 2006
Matt Ettus has the sly smile of someone who sees the invisible. His hands fly over the boards of his Universal Software Radio Peripheral, or USRP, snapping them together with an antenna like Lego bricks. Then he plugs in the naked boards to a USB 2 cable snaking to his Linux laptop.
After few minutes of normal Linux messing around ("Takes forever to boot.... Haven't got the sound driver working yet....") he turns the laptop around to reveal a set of vibrating lines in humps and dips across the screen, like a wildly shaking wireframe mountain range. "Here," he explains, "I'm grabbing FM."
"All of it?" I ask.
"All of it," he says. I'm suddenly glad the soundcard isn't working.
Radio Free Software
Radio Free Software "Call them hackers of the last computing frontier: The GNU Radio coders believe that any device with a chip should be able to do, well, anything." By Sam Williams Dec. 18, 2002 Salon.com
GNU Radio: Tools for Exploring the Radio Frequency Spectrum
Linux Journal: June 2004. An introduction to GNU Radio.
Listening to FM Radio in Software, Step by Step
A more hands-on sequel to Eric's earlier Linux Journal article. This one is from the September 2004 issue.
Something GNU in Radio
CIO Magazine, April 2003