Markus have been experimenting with Arduino and AM signals. He managed to generate AM modulated radio signal by driving timer in PWM mode. Audio signal was taken with Arduino DAC.
Circuit seems to be really simple – modulator part is only made of three components: decoupling cap, antenna and inductor. Transmitter with current configuration is tuned to 734kHz. How it sounds you can see in following video:
[via:Dangerous Prototypes]