I do not have an iPhone, so I do not know if this is a problem for your iPhone. I dock my iPod Touch 3rd generation on this iHome clock with a protective case (http://www.amazon.com/gp/product/B0034684KU/ref=oh_details_o00_s00_i00?ie=UTF8&psc=1) on without any problems.
There is no radio included in this item. It's an alarm clock and iPhone (through 4S) and iPod player. Comes with the old-style 30-pin connector, not the new Lightning connector. If you prefer your music from your handheld, this is the device for you. If you want AM and/or FM reception, look at another iHome device. I got this device because it's elegant and simple. It's worked for my needs, and it sounds great!