Ok, comparing the radio to the cd player is apples and oranges. The CD player is a digital signal straight into your deck. The radio is an analog signal going through all kinds of atmosphere, going through an analog transducer (antenna) and analog input. No surprise that the radio sounds worse.

If, however, we are comparing radio reception in the hybrid to the radio reception in other cars, then we have an issue worth investigating. The location of the antenna may very well have something to do with it. Though the motor controllers are probably not located behind the seat with the batteries, they may be one of the reasons they handled the antenna differently in the hybrid. I have an 04 and my radio sounds just about like any other car radio, so it doesn't seem to be a problem for the first generation. Perhaps the 06 has some other issues or they simply did not choose a good antenna setup. These are the kinds of things that get fixed in later versions of major revisions. Let's hope the 07 has a fix.