I recently discovered Radio Teentaal, a web-radio dedicated to "100% Indian music". The cool thing is - it works perfectly in Linux :-)
Currently the radio is being streamed from Paris, certainly no surprise that it is being streamed from some western country, since such kind of bandwidth is still not really affordable/available in India. It was surprising that I could not find anything interesting / similar from UK, US, Canada or another English-speaking country with large NRI community.
Anyway, they play the latest popular Bollywood beats, no commercials, no interruptions, not even the self-advertisement jingles. Just pure music, at 128kBps stereo mp3. They also have a 64kBps version if you cant enjoy the high bandwidth.