Cant say enough about this. A great way to kill two birds with one stone, get local bands and musicians on the air on your station. It's pretty basic, after you have hit up some of those websites that allow royalty free music for downloading and playing, hit up local talent and get their music on your station.
I have done that and find that the local players are ready and willing to get their product on the air, and will usually send you the material in mp3 format, all ready to go, and it is free, from my experience. Set out a block of broadcast time just to play the local flavor.
I get great feedback and lots of good ideas and new submissions once the word gets out that there is a new outlet for the struggling musician.