Question - have you tried siwtching your phone off & back on? Your thread made me realise I hadn't tried out the radio on my desire, or the headphone jack for that matter....
Imagine my surprise when I tried the radio with normal headphones and the radio didn't work ... so I tried the official headphones, and they didn't work either, whether for radio or even playing music .... so I grumped about it and figured the jack was faulty. Then I tried powering the phone off & back on (early firmware) and bingo, the radio works.
Oh and standard headphones work just fine too.