I have two different Linux packages, Lindows 2.1 and RedHat 8.0. On one, I have Netscape 7.0, and the other has Mozilla 1.01.
I have the same problem on each. It is a java problem. I searched bug reports at Mozilla and found that there is a java error which prevents Linux Real Player 8.0 from being played by Radio@Netscape. Real Player does not have an XPConnect plug-in, and that is why you can't get past the dialogue box asking whether you hear audio.
Mozilla says the problem is a normal bug which should be fixed. the bug was reported in November of last year, and no fix has been made to my knowledge.