Just download the attached APK and install it the usual way. It's been working great so far for me, even RDS, loudspeaker and all! And I like the interface more than the Motorola music player.
The APK is from a Droid 2, the radio hardware seems to be the same.
Please note that I tried this only in a European Defy, with the Central European SBF (JRDNEM_U3_2.34.1).
UPDATE 5th june 2011
Thanks to maniac103 there is now a fixed version of the app that fixes the crashes and problems saving stations. I tried on my 2.1 Defy and it's now rock solid! It also fixed the ugly icon in the notification bar.
Find the new version attached to this post, it's called FMRadio_fixed.apk.