MD5 (Message-Digest Algorithm) is type cryptographic hash function that can be used to check data integrity.
If you run a file through the the MD5 algorithm, a 32-digit hexadecimal "Hash" will be produced. If the file is changed in any way, the hash will change. Basically, when the files are posted for download, they are hashed, and that hash number is posted with the download. After you download the file, you can then generate an MD5 of the file after it has been downloaded, and if they match, you know the file you have is
exactly the same as one that was originally posted (and not corrupted during download). It's not a fool-proof algorithm, as it is not collision resistant, so it's not very useful for security encryption purposes, but it works just fine for file verification such as this.
For example, if you go over the Radio thread here:
[RADIO] The Obligatory Thunderbolt Radio Thread - xda-developers
you'll see the radios listed with the MD5 hash for each. The first radio listed has a hash of: 8E166E93A9A72CB7955440720BA8869A
If you download the file and your MD5 doesn't match, you would know NOT to flash the radio. If it matches, the file is OK (or at least the same as the one that was originally uploaded).
You can google MD5, there are a bunch of apps for windows, linux, mac, etc to generate hashes. As I also mentioned, if you have ASTRO file manager for your Android, you can bring up the properties of a file which will show you the MD5 hash.
To answer the second part of your question, yes, the radio is basically the software component that communicates with the cell towers (wifi and gps too). ROMs do not include radio files, they must be flashed separately. Some ROMs run better and are more compatible with some radios, and different version of Android also require different radio versions.
The latest OTA update that was pushed out for the stock OS, for example, also had a new radio component with it. This radio, along with the original one, represent the 2 different radio sets currently available for the TBolt running Android 2.2. There are a lot of reasons why someone may *want* to change or update their radio...to improve performance, fix known issues, ROM compatibility, etc.
Basically, if you're not sure what it is and your TBolt is running fine, I wouldn't worry too much about it until you've had a chance to learn more about it.