Since I haven't seen anyone really answer the question here, let me give you an update. What I was told by RadioLoyalty is if you are a LC Station they have to pay the advertising commissions to LC who would then take a cut and give you some of it. LC's license only covers streaming ads provided by them!
I have been with RadioLoyalty from their infancy and LOVE their program, but don't want to give up a percentage of my advertising revenue to anyone!
ANSWER: I now use StreamLicensing (there's a link to them in my signature) because their agreements allow me to run ads in my stream without any additional licensing. RadioLoyalty provides me a UNLIMITED IceCast Stream at 128k in exchange for using their player. I earn money each month on pre-roll, banner and in-stream ads that they provide. I can sell and run my own ads and don't have to give them a penny.
I use a frame to pull their player into the custom HTML page provided by StreamLicensing. I will be changing Acoustic Alternative over to StreamLicensing this week and will redirect my index to the custom page as I do now with LC. Check it out for yourself:
http://acousticalternative.com this is a simple redirect. Once the switch is completed, nobody will ever know the difference because all I will do is change the redirect to StreamLicensing.
You still need to promote your own station if you want more listeners. I never rely on other services to do that for me. At the time of this post I had 2,032 users of my station toolbar and over 200 installs of my mobile apps. I got those free (another link in my signature).
In conclusion, RadioLoyalty direct deposits money in my bank account every month, non-fail. I save money with StreamLicensing, get free streaming from RadioLoyalty and get paid to promote my station. What more could I ask for?