You might like my method better than the one suggested above. Make a
backup copy of your Sims2\Music folder before you try this and place it on your desktop, in case you screw up. If you don't understand directions so far or at any point, do not proceed.
1. Select the song you want from your CD.
2. If you have Windows Media Player that comes with most computers, "Rip" the song.
3. Don't do anything now other clicking on My Computer, then click on your C: drive, than locate the song in c:\Documents and Settings\YourName or Administrator\MyDocuments\MyMusic\UnknownArtist\ in a folder with the date and time you ripped the song.
4. Now open another second window, c:\Documents and Settings\YourNameorAdministrator\MyDocuments\EAGames\TheSims2\Music. This is where all the songs are for your radio stations are located in your game, such as hiphop, pop, rnb, etc.
5. The Sims2 will only play music that is in MP3 format. For about $20, I purchased Microsoft Plus! Digital Media Edition, which has what you'll need: Windows Audio Converter. You'll click on this or whatever Audio Converter you have, and select the option to convert a song from WMA to MP3 format. It will ask you where you want the converted song placed, so click on 'browse' and choose to have it placed in whatever radio station folder you want. (By the way, this works too for putting music in your PS2, if you have one.)
6. When you play your game, the song will play on the radio station you chose. You can open up those folders and move the song from one station to another, or delete it. Remember, songs must be in MP3 format to play; roll your cursor over the icon and it'll say whether it's WMA or MP3. I found the hard way that if I accidently moved a WMA song into a PS2, that it would corrupt ALL the songs in the file, so stay focused on this task and triple check your work.
Do not tamper with anything else in those folders!
If anyone knows how to change the name of Radio Stations, I'd appreciate the knowledge. The dumbest thing EA Games ever did was create a station called "Shopping", with stupid music. I'd also have no use for Techno. I'd like to change the names of those stations to After Hours or Romance, or Hard Rock, or Soul, or whatever, you get the idea. This should be a great option in the next extension pack. Until then, if anyone knows how to do it through program files or through SimPE, please let me know.