i haven't heard satellite radio myself but i thought it was advertisement-free. that's why they charged a subscription, no? if so, where is google going to place the ads?

Some of the radios are commercial-free (mostly music radios).

http://www.xmradio.com/advertising/advertising.html

In addition to the XM advertising opportunities listed in Ionut's link, there are also many independent shows on XM that sell their own ads. I don't know, though, if these will be part of the AdWords/dMarc deal; probably some will and some won't.

I currently voice & produce ads for a couple independent radio shows on XM Satellite radio.

I don't currently have any clients that use dMarc, so if any of you Blogoscoped readers eventually use the AdWords/dMarc network to buy radio time let me know... I'd be happy to do your ad production in exchange for some first hand knowledge of the network's operations and effectiveness for my other clients. – http://www.kenkuhl.com

The beauty of Google Ads (in my humble opinion, of course) is that it takes zero effort to put an ad up – you just pick your keywords, write your blurb and let it work. Voice ads (or for that matter, video and graphical ads) are very different and take much more effort. I'm wondering if Google will be able to apply the same success that it had with text ads to other media. Guess we will see.