The HD Radio receiver connects to your iPhone and headphones to the receiver. The headphones are a requirement since they act as an antennae.

iBiquity has been in talks with Apple to get the HD receiver built directly into the iPhone and iPod touch and expects to release another HD Radio receiver that plugs directly into the bottom of the devices around the holidays.
Features:

• Amazing interface
• Tune manually using the wheel or using auto-seek
• Song and station information
• Tell you friends what your listening to through email, Twitter and Facebook
• Store your favorite stations
• See what’s playing on a station’s HD Radio channels

via [iClarified][WSJ]