If the radio works and playing MP3 files don't, then I would say you have a bad block in your player's memory or most likely your player has been HACKED. The radio doesn't use any of your player's memory storage, so it works fine, it's only when you access files on your player's memory (ie: play MP3 players) so I would say it's the memory that's the problem and most likely a hacked player.
Follow the instructions in this post here to remove the memory hack:
How To: Removing Memory Hack.
Let us know of the result.