How it works:
From left to right, the first part is the microphone and some resistors to get it working. Next we have a capacitor and the first transistor, this amplifies the sound from the microphone so that it can be loud enough to work with. The last part, there is a transistor, a coil and some capacitors. This part generates the radio waves and combines them with the sound from the mic to transmit it thru the antenna.
Make a Simple FM Transmitter