Internet radio refers to the practice of broadcasting radio-like content over the Internet (more technically: making streaming audio content available on the Internet for multiple listeners who need not "log in" or otherwise identify themselves). The practice of broadcasting content over the Internet is referred to as webcasting, or just 'casting. (The term "netcasting" is usually used in reference to broadcasting within a private (e.g. corporate) computer network.)
It is a minor issue in general because of disagreements over how to license content for net 'casting; these were more or less resolved by fiat when the RIAA posted a set of rules and rates for webcasting; although not everyone was happy with the rules, webcasters generally complied and the issue went on the back burner.
These issues abruptly came to a head once more, however, with the 2007 announcement of new webcasting rules and rates in the United States which severely threaten both the existence of internet radio as an independent medium and the ability of many independent artists to be heard at all, much less earn a living with their music.