A long shot, but try checking the Radio box in the Parental preferences, click "OK", close the window, then go back into the Parental preferences and uncheck the box. Perhaps that will bring back the Radio feature.
after ensuring that it was not deselected in the general preferences and not disallowed in the parental controls i noticed that it was not showing when i had 'library' selected but would show when i had 'store' selected. I used to find this in my library...appears it has been moved.
Wait i just firgured it out. Go to Itunes>prferences and click on the "General" tab. Under the "show" listing check the box for internet radio. Now that thats done you should see internet radio as an option (see screenshot).
Radio has always been the internet radio stations. It is confusing - APPLE! - for us long time users to change it to something different. I just clicked on "Internet" and found the radio stations. "Internet" does not tell me anything. Maybe - My Radio and Internet Radio to clarify?