The difference in AM and FM

The first difference is what the definition of each uses. AM is amplitude modulation, while FM is frequency modulation.
The AM modifies the amplitude of a wave of the carrier to be received, but the FM modifies the frequency of the wave of the carrier to be received.

AM is simplest of the two. An AM radio picks up the changes in the carrier frequency's amplitude and heightens is to put it through a speaker. The downfall with the AM radios was that it was easily affected by the weather conditions. Also, the AM radio was only able to output one audio channel, but the signal can travel much farther than that of an FM radio.

The FM Radio can output more than one audio channel at a time and it actually stores the actual voice signal so it can not be easily affected or distorted like the AM. FM can also relate easier to stereo so it makes it ideal for music whereas the AM is more of a mono sound making it more ideal for talk radio.

In summary:
FM:                                                                                AM:

• modifies frequency                                                 - modifies amplitude
• shorter distance traveled                                         - travels long distance
• output more than one audio channel                        - easily affected or distorted
• stores actual voice signal to prevent distortion         - only puts out one audio channel
• ideal for music                                                        - ideal for talk radio

Sources:
"The Difference Between AM and FM." The Difference Between AM and FM. N.p., 2013. Web. 18 Feb. 2013. <http://www.differencebetween.net/technology/the-difference-between-am-and-fm/>.