You can quite easily broadcast live audio on the internet and it can consist of recorded items (Eg. Your MP3/CD collection) plus live content (Eg. Your voice via a microphone). There are 3 basic stages of internet broadcasting, as follows:

I: The Source (You)
Your computer mixes together the audio sources coming from your soundcard (which can be Mp3′s being played, live voice or other inputs from CD players etc). It then makes them into a ‘stream’ of data that is sent ‘on the fly’ to…

II: The Server (Us)
Your Shoutcast server with ShoutCheap.com will receive the audio stream coming from your PC and then redistribute it to …

III: The Listener (Everyone Else)
Anyone in the world with an internet connection can then connect to your server. They will be able to hear everything which is going on at your end – so anything you output to the stream server, they can hear!